Dairy Crest is closing two factories in an attempt to cut costs, putting 260 jobs at risk.
The Surrey-based company will close a glass-bottling plant in Hanworth, west London and a cream potting facility in Chard, Somerset, as part of measures to save £20m a year.
The maker of Cathedral City cheese and Country Life butter also warned that its dairies business would post a loss in the six months to 30 September.
Dairy Crest said its Hanworth bottling plant, which employs around 200 people, would close in two years.
The firm said the site had suffered from consumer preference for buying milk in plastic containers rather than in glass bottles. It said that in 1975 around 94% of milk came in glass bottles, but this had fallen to just 4% by 2012.
The company told its 1,400 milkmen and women that it was doing all it could to maintain its doorstep delivery business.
But it said the dairy markets had been extremely volatile, with cream prices down 40% from last autumn’s peak and both cream and skimmed milk powder prices falling 15% last month. Shares fell more than 3%.
Dairy Crest will shut its Chard facility, which employs around 60 people, in the second half of 2015 as the firm said it was not economically viable.
Chief executive Mark Allen said: “The decisions to consult on the closure of our Hanworth and Chard sites have not been taken lightly, but they are right for the long term future of the business as a whole. We will do all we can to help employees who may be affected by these proposals.”
But Dairy Crest added in a trading update that sales of its four key brands – Clover, Cathedral City, FRijj and Country Life – grew 4% in the first quarter to the end of March compared to a year ago, and expected a similar rate of growth in the first half.