Bristol-based Milk Link, the UK’s leading dairy farmer co-operative, has announced a proposed merger with Arla Foods Amba, a giant European dairy co-operative owned by Danish, Swedish and German dairy farmers.
If approved, the merger will create the UK dairy market’s largest player – processing more than 3bn litres of milk a year – with a combined turnover in excess of £2bn.
The plan, which needs the backing of Milk Link members, the Arla Foods Amba board of representatives and relevant regulatory authorities, is expected to provide the basis for improved returns for Milk Link members and enable them to achieve the same level of return as enjoyed by existing Arla owners.
The two co-operatives already have a joint venture in Westbury Dairies, based at Westbury, Wiltshire, and shared facilities at Lockerbie, while Milk Link also supplies raw milk to Arla. The European giant has invested more than £500m in the UK dairy industry where it produces some of the country’s most popular dairy brands including Cravendale, Lurpak and Anchor.
Milk Link chief executive Neil Kennedy said: “The proposed merger has been unanimously endorsed by the Milk Link board with the full support of the Milk Link Member Council and we strongly believe that it will create a strong platform for a sustainable future for Milk Link members and the long term growth of a vibrant British dairy industry.
“Members will have a stake in one of Europe’s largest and most successful dairy businesses and play a positive role in its future development. Our farmers will benefit from Arla Foods Amba’s long-term strategic vision, global scale, broad product and customer base and proven track record in investing in the development and growth of leading dairy brands.”
He added that the merger would provide the basis for improved returns for members, enable them to achieve long-term security and, after a transitional period, the same level of return as enjoyed by existing Arla Foods Amba owners.
Established in 2000, Milk Link is entirely owned by 1,600 British dairy farmers whose milk it processes into a comprehensive range of dairy products as the UK’s largest producer of cheese, supplying all major food retailers, food processors and food service organisations. It also manufactures a wide range of dairy products including long life milk and cream, extended shelf life products, flavoured and functional milks and milk powders.
In its last financial year, Milk Link reported a 7.1% increase in turnover to £628m, employed around 1,200 staff at eight dairy processing facilities and handled 1.5bn litres of milk.
Arla Foods Amba is a co-operative currently owned by Danish, Swedish and German dairy farmers. A top 10 global dairy processing business it has production facilities in 13 countries and sales offices in a further 20. It employs more than 17,000 staff globally and its products are sold under the established brands Arla, Lurpak and Castello in more than 100 countries throughout the world.
