06 August 1997
EU approves dairy joint venture

By Amanda Cheesley in Brussels

THE EU Commission approved the creation of Scandairy K/S, a joint venture between Arla ekonomisk foreng and MD Foods, this week.

To comply with EU competition rules, the Swedish and Danish dairy co-operatives agreed to limit the joint venture to new and rapidly developing product areas which require large investments in research and development.

Traditional dairy products are excluded from the arrangement. The joint venture will initially target northern Europe, with a view to eventually covering the whole of the EU, the Commission said.

MD Foods dominates the Danish dairy sector, while Arla commands a similar position in Sweden. The agreement will be reviewed after seven years to decide if the arrangements should be maintained.