8 October 1999

Scandinavian dairy giants join forces

TWO farmer-owned dairy giants have agreed an intention to merge to form Europes biggest dairy company.

MD Foods of Denmark and Swedish neighbour Arla will, as Arla Foods, process more than 7bn litres of milk a year in eight countries around the world, selling product to more than 120 countries.

The move will take effect from mid-April next year, subject to competition authorities approval.

"Joining forces will enhance the ability to meet demands on product development, marketing, added value, capital investments as well as the skills necessary to meet international customer requirements," says MD Foods.

Everything, add observers, which Milk Marque supporters say has been denied them by the findings in the recent Monopolies and Mergers Commission report which triggered its intention to split.

"This highlights the inconsistency of competition regulations within Europe," says Richard Tomlinson, chairman of North Wales Milk Producers. "It totally blows the MMC inquiry out of the water."

"I hope that UK farmers will be able to follow suit soon and move into processing in a big way without any interference. I hope that Milk Marque successor groups start to move very quickly." &#42