MILK processor Medina Dairy has announced price increase and a planned closure of its Watson’s Dairy site in Hampshire after being hit hard by the ongoing Covid-19 crisis.

The company’s milk prices will jump by 1p per litre, charging an average of 25.75p per litre from September 1.

This marks the fourth consecutive price rise since June but that company said that prices will return to pre-coronavirus levels in the future.

According to the company, recent increase in sales reflects a more positive market environment. But it tries to recover from lost sales.

Lockdown and the closure of the hospitality sector across the UK has resulted in the decision to shut the Watson’s Dairy site, leaving 144 jobs at risk.

Median Dairy said that the move is part of a streamline and money-saving strategy with sales in April being “almost zero” and the need “to create a more sustainable and appropriately scaled business”.

“It is with much regret, that we have announced our proposal to cease operations at our Watson’s Dairy site. The proposal follows a major review of our business which concluded that by simplifying and consolidating our processing activity we will be able to create a more sustainable and appropriately scaled business,” said Sheazad Hussain, chief executive of Medina Dairy.

“This in turn will enable us to continue to deliver a high level of service to existing customers and provide a platform from which we can respond to future market opportunities.”

However, the closure would not have an impact on any of its 156 farmer suppliers and customers as production at Watson’s will be transferred to others sites.

These include Buckley’s Dairy in West Yorkshire, Severnside in Gloucestershire and the Acton dairy in west London operated by Freshways, Medina’s processing partner.