Graham’s Dairy Absorbs Costs to Avoid Price Increases Amid Inflation

Graham’s The Family Dairy, based in Stirlingshire, has reported a reduction in its annual profits after choosing to absorb rising operational costs rather than transferring them to consumers. For the financial year, the company’s pre-tax operating profit dropped to £2.6 million from £4.5 million, while turnover saw a modest increase to £154.9 million from £153.4 million the previous year.

Managing Director Robert Graham attributed the reduced margins to inflationary pressures on the supply chain, including an increase in the farm gate milk price from 36 pence per litre in April 2024 to 40 pence per litre in March 2025. Additionally, the company faced price increases from ingredient and packaging suppliers and the largest recent rise in the National Living Wage.

Despite these challenges, Graham’s Dairy continued its capital investment programme, reinvesting £3.2 million into modernizing manufacturing sites in Nairn and Cowdenbeath, following significant investments in previous years. The company capitalized on consumer trends, recording its largest-ever demand for Jersey and organic milk, which led to the recruitment of new Jersey farmers.

Furthermore, Graham’s expanded its cottage cheese production and launched a new protein ice cream range, securing distribution deals with premium retailers including Waitrose, Sainsbury’s, and Booths. The brand has also enhanced its modern appeal through the efforts of 85-year-old Dr Graham, who has developed a loyal following on TikTok.