We are used to hearing why Britain cannot make it any more due to cost, knowledge, capital or skills, but there is one business to which this country is well suited: milk. Britain has the right environment, the right climate (still) and the right skills to supply vast amounts of milk and dairy products to the world. It’s a bit galling, then, that one of the leading players in this market is Arla, the Danish company behind Lurpak, which said yesterday that it would build the world’s biggest dairy on the outskirts of London.

There have been numerous attempts to replicate the success of Arla — a merger of Danish and Swedish farmers’ co-operatives — since the break-up of the Milk Marketing Board. But not one British co-op has been able to achieve the scale to become an international business.

This has put farmers at the mercy of food retailers, which become more powerful every day. Fifteen years ago, retailers’ gross margin on liquid milk was almost nil. Now it represents about 28 per cent of the shelf price.

The phasing out of European milk quotas should be good news for the British industry. But unless UK dairy farmers find a commercial vehicle that is able to support expansion and investment, they will carry on moaning at the farm gate about Tesco and the weather.

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