Jersey Dairy says there is not enough demand for two producers

It is launching a joint venture with one of the island's largest milk producers, La Ferme Ltd in St Martin.

Those behind the plan say the island needs a more "streamlined and efficient" dairy.

Jersey Dairy said the island was not big enough for two dairies and one was bound to go under, which would not be good for farmers or consumers.

Demand concerns

Those behind the scheme said consumers were paying too much for milk, and unless the industry acted, the product could soon be imported.

Under the plans, La Ferme Ltd and the Jersey Royal Potato Company will hold equal shareholdings, but want other farmers to buy into the venture.

But the managing director of the Jersey Dairy, Kevin Keen, said while competition seemed a good idea, there was not enough demand for two dairies to survive.

The plan has to be approved by the Jersey Competition Regulatory Authority.