Mr Milk aims to deliver your post as well as put a pint on your doorstep

Neil Davidson could be known as Mr Milk. The chief executive of Express Dairies has been in the industry for 26 years and even did a three-week stint as a milkman at the start of his career when every manager at what was then Northern Dairies had to do their bit on the rounds.

"I did mine on a housing estate in Basford, Nottingham," he recalls. "You had to start at 4am and I still remember what the manager said to me on my first day. He said the 1 per cent fall in milk consumption the previous year was a blip and that people would never buy their milk from supermarkets. He was wrong on both counts."

Now 51, Mr Davidson reflects ruefully on the twin trends that have continued to hamper the industry ever since. Though sales of supermarket milk are growing, the dairies make virtually no money from this business as the major grocers beat them down savagely on price. Meanwhile the more profitable doorstep delivery business has been declining by 11 per cent a year as consumers buy cheaper milk on the grocery run (27p a pint on average against 42p from a milkman).

"It's been like street-fighting for years," the snowy-haired Mr Davidson says. "But that's the environment we've had to cope with."

A key part of the rearguard action is the £140m deal announced last month to merge Express Dairies with Arla Foods, part of a Danish co-operative. The deal will transform Express into the biggest dairy group in the UK and add such Arla brands as Anchor butter and Lurpak. As well as £20m of synergies over three years, the deal will make the business less dependent on the fading doorstep market, which will then account for just 10 per cent of group sales.

"We've been talking to the Danes for three years," Mr Davidson says. "We've spoken to everybody and everybody has probably spoken to Arla, too."

The deal looks a good fit on paper, but the big fly in the ointment is the possibility of a regulatory block. Because of Arla's European turnover the deal comes under European Commission jurisdiction, though the UK authorities have the right to ask for the case to be referred back to the member state.

The problem will not be in doorstep deliveries, where the two companies have no overlaps, but in supermarket milk. Here the combined group will account for almost half of all supply and more than half to Tesco.

Could it be blocked? "I'm not going to second guess what the competition authorities might say, but in the past the view has been taken that the grocers are big enough to look after themselves," Mr Davidson says.

The deal is an unusual one in that it is essentially a reverse takeover of Express by Arla, which will end up with 51 per cent of the shares in the combined group. But though the new business will take the Arla name, Mr Davidson has managed to wangle himself the chief executive's job. This expanded role will include wrestling with marketing plans for Lurpak and Anchor as well how to truck milk around the country.

"That's part of the excitement after all this street-fighting," he says.

According to Mr Davidson the skills of Express Dairies are more akin to those of a logistics operation than a food business. "Milk is a very lightly processed product and we really don't do much to it," he says. "It comes in from the farmers and we pasteurise it, which basically means heating it up, then it is rapidly cooled which takes all of 15 to 20 seconds. Then we take some of the fat out and put it in a bottle or plastic container.

"We then take it direct to the supermarket. Not to a distribution centre, but direct to the back of the store. That's to virtually every supermarket, every day, twice a day in some cases. It's only us and the bread men that go direct to the supermarket any more."

Such a system requires military precision, but sadly not one which can be leveraged into other areas. "The lorries are already full and distribution is already a very competitive business," Mr Davidson says.

The area Mr Davidson is trying to invigorate is the traditional milk float, which he is trying to get to offer more services. Express has 24,000 milkmen, who are self-employed. In the past the company has tried to set them up as everything from dry cleaning specialists to the "last mile" delivery solution of the internet boom.

With Express milk floats trundling past half the postcodes in the country, Mr Davidson is convinced there is still scope for these low-cost, environmentally friendly workhorses to take on a greater load. Now, though, he reckons he has the answer: the milkman can deliver the post as well as milk. Express has been granted a Postcomm licence to deliver 46 million packages a year after an interim licence which is already enabling it to deliver 5,000 to 6,000 items a week. "It's ideal because there is no money to collect and there is nothing to sell. It's money for no extra effort," Mr Davidson says.

In many ways Mr Milk's long service to the industry is ironic considering that he initially wanted to pursue a completely different career. He studied industrial psychology at Nottingham University and then found himself in London working for a small firm of consultants. Mr Davidson recalls: "They did work for Chloride, which was then run by (Sir) Michael Edwardes. It was one of the first companies to use psychometric testing. Our outfit was three men and a dog and I was the dog so I thought I'd go into personnel."

In 1977 he joined Northern Dairies, then a liberal organisation run by Alec Horsley. "I made a name for myself handling an industrial relations problem," he says, "but then I noticed that the line managers were paid more than me and so made the move. Staying in the food industry was never really on the horizon, but every time I came to a crossroads milk always seemed to be the running theme."

He's still fond of his academic background, and did an MSc in Organisational Psychology in 1990 without telling his employers, by this stage called Northern Foods and run by Mr Horsley's son-in-law, Chris Haskins. "It was this Quaker, CND company," Mr Davidson says, "and they would have thought, 'we're welly-booted milkmen, we don't go in for that sort of thing.'"

When not embroiled in matters milk Mr Davidson plays golf, though his roots lie in cricket. He kept wicket for his home town team of Loughborough Town, where he played in the same side as David Gower before the blond left-hander moved on to Leicestershire and England. "He scored 170 against Northampton once which would have been a good score for our whole team," Mr Davidson remembers.

For now, though, his focus is completing the Arla tie-up, on which Express shareholders are scheduled to vote on 24 April. And this former cricketer would surely swap a few of his past glories behind the stumps for getting the deal through the regulators.

NEIL DAVIDSON - THE MILK MAN COMETH

Position: chief executive, Express Dairies

Age: 51

Education: Degree in Psychology from Nottingham University, MSc in Organisational Psychology from Birkbeck College, London.

Career: Joined Northern Foods in 1977 after short stint in psychometric testing company. Responsible at various times for the group's flour milling, chicken and canning operations as well as milk. Joined the board as head of milk division in 1994. Express Dairies chief executive since demerger in 1998.

Interests: Golf, cricket, family (two daughters, aged 17 and 13).