Simon Cumpsty, Head of Employee Relations and Reward : An Auto- Enrolment Story

Introduction to Dairy Crest Dairy Crest is the number one British owned dairy company Market capitalisation: £650 million Previously owned by Milk Marketing Board Floated on London Stock Exchange 1996, turnover £750 million Since flotation turnover has increased to £1.4 billion, reflecting strong growth in added-value sales Pre-tax profit 2012/13 £50.6 million 2013 – Only food manufacturer to achieve BITC corporate responsibility platinum ranking (98%) and highly commended as company of the year

Dairy Crest today Dairy Crest is the UK’s leading British owned dairy company manufacturing and selling: a strong portfolio of dairy foods brands in the UK fresh milk to UK retailers, middle ground customers and residential customers We have 13 manufacturing sites in England and Wales: - 4 milk processing sites (3 retailer and 1 doorstep) - 1 cream site - 3 cheese sites - 2 spreads sites - 2 other food and ingredients sites - 80 doorstep delivery depots 4,800 Employees 1,300 Self – Employed Franchises Dairy Crest is one of the largest purchaser of milk in the UK, buying around 1 in every 6 litres produced. Direct contracts with 1,200 dairy farmers

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Dairy Crest Foods – strong British brands Focus on 4 key brands – other brands include Utterly Butterly, Willow and Vitalite Momentum maintained through innovation, advertising (TV) and promotions

Dairy Crest : Past and Current Pension Arrangements Defined Benefit (Final Salary Scheme) – Closed April 2010 Contribution / Accrual Rates : 40ths, 50ths and 60ths 7% Employee Contributions Life Cover : 4 x salary plus Spouse and Dependents Pension Ill Health : Full and Limited Incapacity Pensions Defined Contribution (Zurich Stakeholder Scheme) – From 2006 Contribution / Accrual Rates : 1:2, 1:1.5, 1:1.25 Life Cover : 7 x salary Ill Health : Group Income Protection Scheme (GIP’s) for a 2 year limited period Additional benefits if contributing a minimum of 3% up to a maximum of 8% In replacing DB Scheme with a DC Scheme replicated additional benefits as far as possible Pension key part of Dairy Crest’s reward offering

Dairy Crest : Impact of Auto-Enrolment To Date Opt Outs and On Costs From end of January 2013 main section of Stakeholder Scheme closed for all employees (except Band 5 and above new starters and promotions) until April 2014 April 11th – 1228 Employees enrolled April 25th – 1203 Employees enrolled 235 Employees opted out as at end June 9.67% Opt Out Rate Majority of those opting out monthly paid Average run rate of additional Employer contributions £5,913 per week £21,751 per month £568,488 Annualised

Dairy Crest : Auto-Enrolment Communications and Implementation Approach Agreed with elected and constituted PCCF (Pensions Communication and Consultation Forum) Low key Last opportunity given to join main section without 12 month wait Very different to 2010 Role of effective Governance group key Defined Disputes process Guaranteed representation of Trade Union including National Officer 3 Company Appointed Representatives Supporting on line financial planning tools and pre-Retirement education

Dairy Crest : Auto-Enrolment Impact on Reward Lower annual pay award Relaunch and reinvigoration of Voluntary Benefits offering Over 35% workforce registered and using regularly Low Opt Out Rates lead to review of and agreement with PCCF on matching and additional benefits from April 2014 Mitigate Risk and Cost exposure Balance best benefit provision with minimising cost

Dairy Crest : Auto-Enrolment Moving Forward Review impact of Trading Up in April 2014 Opportunities to link Trading Up and additional benefits to possible flex arrangements Pension proposition remains a key part of our Benefits offering Fits with our Culture and Values