Milk Marque takes over Welsh cheesemaker…
Milk Marque takes over Welsh cheesemaker…
By Philip Clarke
MILK Marque has made its first acquisition through its subsidiary Milk Marque Developments, purchasing Welsh cheesemaker Aeron Valley Cheese for a sum close to £10m.
But already the deal could be heading for trouble as the Dairy Industry Federation presses the Office of Fair Trading to refer the takeover for Monopolies and Mergers Commission investigation.
The trade claims that having a dominant seller of milk also processing its own milk could be against consumer interest and lead to market distortions. "When the MMC was asked to look at the case of Scottish Milk, which sought to purchase CWSs liquid milk business in Scotland in the run-up to deregulation, this was the conclusion it reached," said DIF director general, John Price. "This was because there were insufficient safeguards."
But Milk Marque countered this week that the situation in 1994 was far removed from the reality of today and was confident it would not be referred. "The market is now much weaker and Milk Marque has suffered from a lack of demand for its milk," said a spokesman. "Elsewhere on the Continent, milk processing capacity is concentrating into the hands of fewer farmer-owned businesses. We are getting left behind."
And he added that, while Milk Marque still dominated the liquid side of the industry, its acquisition of Aeron Valley would give it only a tiny stake in the cheese business.
He also stressed that Aeron Valley would have to compete for Milk Marque supplies in exactly the same way as any other of its customers and would be subject to the same documentation. It would not get special treatment.
The company currently processes 200,000 litres a day to produce 4000t of cheese a year.
Milk Marque Developments intends to double this. And with £60m funding available, further acquisitions can be expected, as the co-op moves towards its objective of processing 15% of its supplies by 2000.