Arla looks to milk UK, German dairy mergers

Swedish-Danish dairy cooperative Arla announced Tuesday it was planning two large European mergers, with Germany's Milch-Union Hocheifel (MUH) and Britain's Milk Link, both cooperatives.

Arla looks to milk UK, German dairy mergers

“Arla Foods is today announcing plans for two major mergers – with Germany’s eighth largest dairy, the cooperative Milch-Union Hocheifel … and with the UK’s fourth largest dairy, the cooperative Milk Link,” Arla said in a statement.

The three cooperatives are set to make a final decision on the mergers on June 26, but the deals will also need clearance from regulatory authorities, it added.

Arla, which will retain its name, said the mergers would allow it to grow from having 8,024 co-op owners in Denmark, Sweden and Germany, to having 12,300 owners in those three countries and also in Britain, Belgium and Luxembourg.

Arla, which raked in 55 billion Danish kroner ($9.4 billion) in sales in 2011, said that if the mergers go through they will “immediately increase Arla’s revenue by 9.0 billion kroner per year.”

The Scandinavian company, which exports products under the brands Arla, Lurpak and Castello to more than 100 countries and which employs more than 17,000 people, said that by 2015 it aimed to “be the UK’s largest dairy company and (to) rank third in Germany.”

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Swedish dairy farmers in tractor blockade threat

Dairy farmers in Sweden are threatening to use their tractors to block all dairies in the country if the price of milk does not increase.

Swedish dairy farmers in tractor blockade threat

An agricultural turmoil is bubbling up in Sweden. During the last few months, there have been several reports of dairy farmers being forced to close down their farms due to the low price of milk and rising expenses.

Now, some of the farmers have had enough and are threatening to use their tractors to physically block Swedish diaries if the situation does not improve.

If the blockade becomes a reality, farmers would still milk their cows, but let the milk go to waste.

Stefan Gård, the president of lobbying organization Swedish Dairy Farmers (Svenska Mjölkbönder), explained that, at this point, the group does not back the threat to block the dairies.

“I fully understand why they are doing this. The situation is critical. You can’t leave a pot on the stove for too long before the top blows off,” he told the Local.

One of the enraged farmers is Anders Birgersson from Vikingstad, near Linköping in central Sweden.

“We need to raise the price of milk by 30 öre ($0.04) [per litre] to be able meet the market fair and square,” he told Sveriges Radio (SR).

The group hopes to bring together enough farmers for a demonstration at Jönköping, southern Sweden, to be able to put some weight into their threat to block all Swedish dairies.

On Thursday, Swedish Dairy Farmers plans to have a demonstration of its own in Stockholm.

During the demonstration the organization is going to hand over a document to Minister of Rural Affairs Eskil Erlandsson. The document will show the extent to which current laws and rules affect Swedish dairy farmers.

“At the moment, we are focusing on our own demonstration on Thursday. After that we don’t know what we will do,” Gård told The Local.

“The next step might be to join the blockade.”

Eric Johansson

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