Avonmore seeks to become EUs third largest food group
Avonmore Foods is seeking a merger with farmers of the Waterford Foods co-operative to create Europes third largest dairy group.
The merger needs 75% approval of the 4,500 farmers who make up Waterford to go ahead. The combined companys milk pool will be 701m gallons, accounting for 355 of the Irish market and a larger share of the UK market than either Northern Foods or Unigate. It will result in savings estimated at I30m a year. Disposals are already on the cards with plans flagged to sell the UK juice business and the US cheese operation.
The merger is being driven by the need for scale. Many producers have found the gap between the price they pay for raw milk and the selling prices of their commodities too narrow to make a profit. It has also been brought about by changes in the retail market where the supermarkets are increasingly taking over from doorstep sales.