25 July 1997
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
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.