The Office of Fair Trading (OFT) has ruled a major cheese supply deal between First Milk and Adams Foods can go ahead.
The British dairy co-op and the Irish cheese-maker struck a partnership in October for Adams to cut, pack and market 50,000t a year of hard cheese made at First Milk’s Lake District and Haverfordwest creameries.
Adams would market the cheese to British customers, while First Milk would still manage the sales of its cheddars to export markets.
The deal is expected to raise Adams’ turnover to more than £500m and would continue the company’s growing involvement in the British cheese market, having invested £60m in the UK including at its cheese-packing facility in Leek, Staffordshire.
See also: First Milk joins forces with Adams Foods
Since November, the OFT has been investigating the deal’s impact on competition in the UK hard cheese market and last week announced they had cleared the partnership, leaving the companies free to firm up an agreement.
“First Milk welcome the announcement by the OFT giving competition approval for the proposed strategic cheese supply partnership with Adams Foods,” a First Milk spokesman said.
“Having received the OFT approval we will now be working to finalise the deal,” Adams Foods said in a statement.
Adams Foods – owned by the Irish Dairy Board – supplies more than 30% of the UK retail market for pre-packed hard cheese and owns brands such as Pilgrims Choice cheddar and Kerrygold butter.
Glasgow dairy co-op First Milk had a turnover of £530m last year.