Graham's The Family Dairy reports 'challenging' year
Graham's The Family Dairy has reported a fall in sales and profits, following a "particularly challenging" year for the dairy industry.
The Stirlingshire-based company said it had been hit by falling dairy prices as production outstripped market demand.
Sales in the 12 months to March fell year-on-year by £2.9m to £83.6m, while pre-tax profit dipped slightly to £1.43m.
Graham's described its annual results as "solid".
In a statement, the company said: "Graham's commitment to quality and innovation has led to more than half of Scotland's population buying Graham's products.
"However, the global milk market has shown a great deal of instability and 2015 was a particularly challenging year in terms of milk volumes, with farmers producing more milk than the market could comfortably consume.
"The oversupply led to significant balancing costs for Graham's and deflation in the market."
The year saw Graham's expand into the quark, cottage cheese and sour cream market with the purchase of a Fife dairy.
Graham's already operated a dairy at Airthrey Kerse in Bridge of Allan, a processing plant in Nairn and depots throughout Scotland.
The company is waiting to find out whether plans to build a new dairy processing plant and housing development in Bridge of Allan will get the go-ahead.
Stirling Council rejected the plans in March but Graham's later appealed the decision. It is now being considered by the Scottish government's Department of Planning and Environmental Appeals.
The company also secured two major partnerships last year.
It became exclusive milk and whipping cream supplier to all 68 Starbucks stores across Scotland and signed a seven-figure deal to provide dairy products to customers of food supplier Brakes.
Earlier this month, Graham's was named as the most valuable Scottish dairy and food brand by consultancy Kantar Worldpanel.
Graham's managing director Robert Graham said: "We are pleased to have delivered a solid performance during what has been an incredibly challenging time for the entire dairy industry."