Saputo to end much-vaunted dairy ingredient production, with potential loss of 80 jobs

Saputo Dairy UK has announced plans to stop manufacturing the dairy ingredients galacto-oligosaccharides and demineralised whey, in a move that could lead to 80 job losses.

The supplier and Cathedral City owner is instead planning a return to sweet whey powder at its Davidstow plant in Cornwall.

It said the production of demineralised whey and GOS for the infant formula market – long touted as a big money-spinner for the business – was no longer financially viable.

The Dairy Crest business acquired by Saputo in 2019 invested more than £60m in its ingredient manufacturing capabilities during the 2010s, with former CEO Mark Allen telling The Grocer in 2016 that the opportunities in this market were “huge”, particularly in China.

However, the business – which posted pre-tax losses of £13.5m in its most recent accounts for the year to 31 March 2024, largely due to the depreciation of cheese stock prices – said market dynamics within the ingredients category had changed.

“Since the decision was made in 2013 to start producing functional ingredients, demographic shifts and changes in demand for different whey formats mean it is no longer in SDUK’s best economic interests to continue servicing the infant formula market,” the supplier said.

“We will consequently be entering into a period of consultation with a group of employees regarding these proposed changes,” it added.

If the proposal proceeded, “we regretfully expect to make around 80 redundancies”, Saputo said. The changes are expected to be completed by the end of September 2025, through it stressed the proposal “has no impact on our supplying farms or our cheese production”.

The supplier, whose Canadian parent company Saputo is now facing steep tariffs on its dairy exports to the US, said “market conditions are such that we are having to take difficult, but decisive, actions to simplify the business and introduce meaningful efficiencies to ensure we are best placed for the future”.

The business pledged to “ensure all employees who may be impacted by this proposal are well supported”.