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The Jersey Dairy is sending milk to Guernsey to turn into cheese.
Cheddar made from Jersey milk has been on sale for a number of weeks, but the company says it is cheaper to make it in Guernsey rather than in Jersey.
The dairy is increasing its range of products made from milk produced by the island herd.
Jersey Dairy Managing Director Kevin Keen says it is less expensive to use expertise in Guernsey rather than set up a cheese manufacturing plant.
The company says the cheese could be made in Jersey in future if it sells well.
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