Arla will become the largest supplier of fresh milk to Aldi when a new tender comes into force in October 2018.
The agreement means the farmer-owned co-op will supply the majority of liquid milk and cream to stores in England and Wales for the UK’s fifth-largest supermarket.
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“We have a long-standing relationship with Arla and are pleased to reach an agreement for them to become our main liquid milk supplier in England and Wales,” said Julie Ashfield, Aldi managing director of buying.
“This new agreement will enable us to work more closely with British dairy farmers to further enhance sustainability and animal welfare standards.”
It is not yet known if the agreement will lead to a dedicated pool of Arla farmers supplying Aldi, similar to the co-op’s deal with Morrisons, which comes into force in March this year.
Graham’s Family Dairy will continue to supply stores in Sterling, while Trewithen Dairy will cover outlets in Cornwall. Muller will retain two of the four regions it supplies under the current arrangement, as well as supplying the supermarket with dairy products such as butter and yoghurt.
Farmers Weekly understands the breakdown of fresh milk supply to Aldi is currently 60% from Arla, with the remaining 40% coming from Muller.
A spokesman for Muller said: “Aldi remains an important and valued partner for our business for whom we are providing a growing portfolio of dairy products made in Britain with milk sourced from British dairy farmers, to support their dairy category offering to consumers.”