Supermarket milk prices are set to increase even further after one of the biggest suppliers to Tesco and Sainsbury's said that it was having to pass on "exceptional" cost rises.

Robert Wiseman Dairies said today that it was seeing overheads rising across its business, including increased feed costs, higher packaging costs and higher transport costs because of the high oil price.

Food inflation has been running at its highest level for 14 years, after key ingredients, including wheat, cocoa and dairy products, have more than doubled in price.

Dairy prices have been climbing because of poor milk production globally and a sharp increase in demand for dairy products from China.

The cost of whey and skimmed milk powder has soared in the past year.

The Glasgow-based Robert Wiseman gave warning in January that it would review prices if these cost pressures continued.

The company said today: “We have begun implementing higher selling prices to cover these cost increases, which will also allow an increase in the price paid to our milk suppliers.”

Wiseman did not offer details of the price increases but it said this year that the price it paid to farmers had gone up by more than a third in 12 months.

Almost the whole of this price increase has been passed on to customers.

The price update came as Wiseman said that volumes and turnover for the year to March 29 were in line with forecasts.

It has benefited from a £2 million advertising drive behind low-fat product The One, which has seen sales grow 34 per cent year-on-year.

Production at the company’s new South West dairy at Bridgwater is also building steadily, although it said that delays by contractors meant commissioning of a third and final filling line on the site was not expected until late May.

The delays will result in extra costs of £1 million in the first quarter of the new financial year, as planned cost savings will not be achieved until the end of June.

Robert Wiseman operates other dairies in Aberdeen, East Kilbride, Glasgow, Manchester, Droitwich Spa and Okehampton in Devon.

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