SALES at Graham’s the Family Dairy have fallen after a global oversupply in the milk industry led to deflationary pricing.

The family-owned firm said sales slid three per cent to £83.6 million in spite of a number of new contracts, including a deal to supply Starbucks and a multi-million contract with Brakes Scotland. Pre-tax profit fell to £1.43m from £1.5m.

Managing director Robert Graham said he was pleased to have delivered what he called a solid performance during “an incredibly challenging time for the entire dairy industry”.

Although the group made progress, the global milk market has shown a great deal of instability and 2015 was particularly challenging in terms of milk volumes, with farmers producing more milk than the market could comfortably consume, leading to significant balancing costs for Graham’s.

The Stirling-based dairy group – whose chairman Robert Graham Snr was recently the recipient of the Outstanding Contribution award at The Herald Scottish Family Business Awards – said it remained committed to investing in new products, and expanding its export business.

Continued investment in plant and machinery led to capital expenditure of £1.4m. The year also saw the purchase of Glenfield Dairy in November 2015 which led to the launch of quark, cottage cheese and sour cream products.

“At Graham’s we never stand still,” said Mr Graham. “We’re always innovating and have exciting plans for future growth, including new product development, plans to develop a new dairy processing plant, and further expansion overseas.”