Shares in Dairy Crest were down on the FTSE 250 in afternoon trading after the group gave an unexciting update for the nine month period ended 31 December 2010.

The group said that sales were "broadly unchanged" from the previous year and that pre-tax profit was in line with expectations "despite a difficult economic environment".

Dairy Crest said that its five key brands had performed well, with third quarter sales of the brands up 11 per cent. In addition the group has increased its sales of milk to supermarkets, having begun supplying Tesco with fresh milk.

The group said that increased volumes to supermarkets had helped offset falling sales to the "very competitive" middle ground milk market.

Net debt at 31 March 2011 is predicted to be lower than at the same point last year as the group continues its efforts to cut costs in the face of rising input costs.

Mark Allen, Chief Executive of Dairy Crest, said, "We are encouraged by the progress we have made so far this year and anticipate that we will maintain our momentum through the fourth quarter.

"Our employees, dairy farmers and hauliers had to face challenging weather conditions during much of the quarter. We would like to take this opportunity to thank them for their outstanding efforts that helped ensure that there was no significant effect on the business.

"We remain cautious about the economic environment for next year but we are well positioned to meet the challenges. Our strong range of products and broad customer base will help with this. In addition we will continue to innovate, control our costs and support our brands. "

By 14:00 shares in Dairy Crest were down 1.36 per cent on the FTSE 250 to 375.40 pence per share.