Meadow Foods acquisition shows post-Brexit planning

The UK’s largest independently owned dairy group Meadow Foods has acquired a Wrexham-based dairy processor, opening the possibility for increased export operations outside the EU.

The purchase of Roil Foods by Meadow is the processor’s second major acquisition, following a substantial strategic investment, believed to be a 35% stake, from US global food and agribusiness investment firm Paine Schwartz Partners.

See also: Analysis: Hard Brexit best for UK milk prices

Roil Foods is a manufacturer of edible dairy-based oils including organic anhydrous milk fat (AMF), concentrated butter and butter ghee – products with long-established popularity in South Asian and Arabic markets.

The company already has a presence in European, Asian and Northern and Southern American markets, highlighting a concerted move from Meadow Foods to buttress its 650 producers from the uncertainty around a trade deal with the EU’s single market after Brexit.

“This acquisition will further strengthen our portfolio of quality dairy ingredients and marks the next step in the delivery of the ambitious growth plans we have for the business,” said Mark Chantler, chief executive of Meadow Foods.

“There are obvious operational synergies between the businesses and we’re excited by the opportunity to extend our range and reach into new markets and product lines.”

Non-EU markets crucial for dairy

Recent analysis from Kite consulting shows a hard Brexit would be the best outcome for the UK dairy industry, but the development of non-EU markets for dairy exports would be crucial.

In 2017, the UK exported 480,729 tonnes of cheddar around the world, however just 28.6% of this was to markets outside the EU.

The proportion of total UK exports of butter that went outside the EU was even smaller, with just 16.8% of the 244,946.1 tonnes shipped to destinations outside the single market.

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