UK dairy producers discuss mega-merger

UK milk producer cooperative Milk Link announced on May 22nd that it is considering a merger with Scandinavian-based dairy giant cooperative Arla Foods amba. The combined milk pool of the 1,600 members of Milk Link and existing Arla Foods UK milk intake would give the new grouping control of about a quarter of the UK’s current milk output.

The decision will be put to a members’ vote on June 26. Milk Link members already face cuts of around 1.5 pence per litre on their milk, in the wake of 2 pence per litre contract price cuts announced recently by Robert Wiseman and Arla Foods UK. The Scandinavian side of the partnership has its origins in the Danish cooperative MD Foods, which set up a Leeds-based business in 1990 to develop retail dairy brands like Lurpak butter, Cravendale milk and Castello cheese. throughout the 1990s, MD Foods acquired production capacity, notably in liquid milk filling from the Coop and Lord Rayleigh, before acquiring the Express Dairy business in 2003.

By 2007, Arla Foods UK had bought back the 49% shareholding that was traded publicly on the UK stock exchange, becoming a subsidiary of the Arla Foods amba cooperative. The extent to which the Milk Link membership shares its vision with a Scandinavian dairy giant will be shown on June 26.

Peter Crosskey
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Peter Crosskey is based in the UK.