SHARES in Robert Wiseman Dairies tumbled 17 per cent yesterday after the milk group revealed that it had lost one of its biggest contracts.

The stock plummeted 47½p to 236p after Asda, the supermarket chain owned by Wal-Mart, said that it was ending its milk supply contracts with the company and its rival Dairy Crest.

The contracts are worth about £20 million to Dairy Crest and £70 million to Robert Wiseman, which at present supplies 40 per cent of Asda’s milk volume. Asda is to buy all of its milk from Arla Foods UK, the country’s biggest milk processor.

Shares in Dairy Crest, which supplies 10 per cent of Asda’s milk, dived 17½p at 359p.

Chris Brown, Asda’s agriculture strategy manager, said it chose Arla because it could provide “full traceability from the farm through to the bottles in our customers’ trolleys”.

Gwyn Jones, chairman of the National Farmers Union’s dairy board, described the move as “a positive step in connecting farmers with the needs of the marketplace”.

But David Handley, chairman of Farmers for Action, a direct action group, expressed concern that the deal tightens Asda’s hold on dairy farmers.

Robert Wiseman said Asda’s decision was a “disappointment”. It had hoped to boost supplies to Asda to 50 per cent, a view expressed by Alan Wiseman, chairman, when announcing results this month.

Arla, formed from the merger of Express Dairies and the UK division of Scandinavia’s Arla Foods last year, will double its supply to Asda, which currently sells 450 million litres of milk annually.

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