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Two cooperative firms Milk Link (Moo milk, Gervik, Caradog cheese) and Arla Foods (brands include Cravendale, Lurpak and Anchor) are to merge.

”>The merged group might have sales in excess of £2bn. The new entity needs the approval of Milk Link Members, the Arla Foods board and the regulatory authorities. The Danish based Arla Group has also announced another cross border merger with Milch-Union Hocheifel (MUH), Germany’s eighth largest milk producer.  It is possible that some dairies and processing plants may be mothballed, or sold off.

This may be a response to the recent takeover of Robert Wiseman Dairies by Muller Group.

It remains to be seen how far this later bout of mergers in the dairy industry strengthens the suppliers’ bargaining power with the supermarkets. It is still possible that this round of consolidation could be blocked by UK or EU competition authorities.

Milk Link had been involved in merger negotiations with First Milk in 2007, but both parties failed to reach an agreement in February 2008. Arla UK was formed in 2003 after a merger with Express Dairies.

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