Sweden’s Arla in merger talks with German co-op

Swedish-Danish dairy cooperative Arla Foods confirmed on Friday that it is in merger talks with Germany's Hansa-Milch, also a cooperative.

Sweden's Arla in merger talks with German co-op

Hansa-Milch members and Arla’s board will vote on the possible merger in February and March of next year, Arla said in a statement on Friday.

“Together with Hansa-Milch, we would be able to offer a complete portfolio of dairy products from one single supplier, which will enable us to become an even more attractive partner to the German retail trade,” Arla CEO Peder Tuborgh explained in a statement on Friday.

A key element of Arla’s strategy is to pay members as high a price as possible for their milk. Consequently, the company needs to grow its business further within Europe, particularly in the German market.

As such, Arla would be able to expand its presence in Germany through a merger with Hansa-Milch.

As part of a merger between the two cooperatives, farmers who are members of Hansa-Milch would receive a milk purchase guarantee with no time restriction. In addition, Arla will assure Hansa-Milch of a milk payment price calculated on the same basis as its own members.

In previous years, milk prices for the Scandinavian cooperative has generally been higher than those of Hansa-Milch.

Arla is owned by about 3,500 farmers in Sweden and 3,700 farmers in Denmark. Hansa-Milch has about 1,000 members in northern Germany’s Schleswig-Holstein and Mecklenburg-Vorpommern, of which 670 are active.

The new proposed corporate structure would include a board of representatives comprised of 150 members from Sweden and Denmark and five from Denmark, as well as a board of directors with 18 members from Sweden and Denmark and one from Germany.

Arla is known in Germany for its specialty cheeses Arla Buko, Castello and Arla Höhlenkäse, as well as its Arla Kærgården and Lurpak butters.

A potential merger would be subject to approval by the European Competition Authorities.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Swedish politician condemns Denmark’s ‘shit sandwich’ sewage plan

Copenhagen's water utility has been asked to postpone a plan to dump 290,000 cubic meters of untreated raw sewage into the Øresund Strait in the face of outrage from citizens and politicians in both Sweden and Denmark.

Swedish politician condemns Denmark's 'shit sandwich' sewage plan
Swimmers taking part in the Øresund Challenge back in 2011. Photo: Dennis Lehmann/Ritzau Scanpix
After a meeting on Monday afternoon, Ninna Hedeager Olsen, Copenhagen's environmental mayor, said she had asked civil servants to ask Hofor postpone the release until the autumn. 
“There has been an opportunity for Hofor to postpone the test work they will be doing until October,” she told state broadcaster DR. “That is why I have asked the administration to demand it.” 
Politicians in both Denmark and Sweden were up in arms on Sunday when details of the plan became known, forcing the utility to first postpone the release by 24 hours, and now postpone it further. 
Niels Paarup-Petersen, a member of parliament for Sweden's Centre Party, told The Local that the plan was just the latest in a long list of insults Denmark had thrown at its Scandinavian neighbour. 
“We’ve been served shit sandwich after shit sandwich over the last couple of years, but we've never been served so much shit in one go as this,” he said.  
Jacob Næsager, a city politician with Denmark's Conservative party, said that it was astonishing that the plan had been approved. 
“Many people want to swim in the Øresund, and I think it is extremely disgusting that people literally have to swim in other people's shit,” he said. 
Finn Rudaizky, a city politician for the Danish People's Party on the city's environment committee, called the plan “completely crazy”.
After Olsen announced the decision to postpone the plan, Morten Østergaard leader of Denmark's Social Liberal party congratulated those who had spotted it and launched a protest. 
“Good God, that was hanging by a thread, but hats off for the action,” he said. “'Shit good', as Niels Paarup from our sister party wrote.” 

Paarup-Petersen told The Local that he recognised that the utility had to empty the sewer to allow construction to go ahead at Svanemølleholmen in Nordhavn.
But he said there was no need to dump so much sewage in one go right at the start of the summer swimming season.  
“They can spread it out over a longer period, they can do it in a better season when people won't be swimming and there might be better currents,” he said. “It would also be possible to plan it a bit better so it will be released over more days.” 
He said he planned to work together with the Danish Social Liberal party to put in place greater environmental protections around the Øresund. 
“In the long term we have to find solutions, because there are solutions that can mean that the Øresund no longer needs to be a sewer,” he said. 
In a memo to the mayor issued on Monday, city civil servants said that they could not withdraw the permit issued to Hofor, as it had been drawn up in accordance with the correct procedures. 
Hedeager Olsen said she would now launch ask a team of  external experts in law and the environment to investigate why the city's civil servants believed it was right to authorise the discharge. 
“When the administration today concludes in a note that they believe the case management has been correct, and at the same time you hear environmental professors and others say that it is not, it is important to get the case investigated at a fundamental level,” she told DR.