Müller Milk & Ingredients has launched a review into its food service delivery operation, which supplies fresh milk and other products to 3,000 non-residential customers in England and Wales.

Muller will now conduct a 45 day review and consultation into the operation, putting 250 roles at risk of redundancy. The service is currently suffering losses of around £5m per annum. 

In a statement, Muller said it wanted to assess whether existing food service customers, which include workplaces, restaurants, pubs, bakeries and contract caterers, can be better served by the company or alternative providers.

The news follows the collapse of van delivery firm KerryFresh, which fell into administration last month.

Müller Milk & Ingredients md Andrew McInnes said: “Whilst the Müller Milk & Ingredients food service operation is a very small part of our overall business, it is vital that it is profitable and viable. It is clearly unsustainable in its current format.

“We would therefore like to take this time to assess the role and fit of this part of our business within our wider strategy for the future, and determine whether there are better and more sustainable ways to supply the needs of our smaller food service customers.”

Muller’s food service delivery arm was acquired by the company two years ago, as part of the Dairy Crest dairies business. The operation represents less than 2% of annual turnover.  

The company’s sister business Milk & More will not be affected by the review.