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Plans Place Producers on European Price Platform

NFU Scotland has welcomed merger proposals that could see the UK farmer-owned business Milk Link become a part of the giant European dairy co-operative, Arla Foods amba.

Arla Foods amba, currently owned by Danish, Swedish and German dairy farmers, is a top 10 global dairy processing business with production facilities in 13 countries including Scotland. If the merger with Milk Link proceeds, it will create the largest player in the UK dairy market, processing more than three billion litres of milk per annum and have a combined turnover in excess of £2 billion.

The proposal – which would directly affect a number of Scottish dairy farmers - fits with NFU Scotland’s vision for the dairy sector, would see producers more closely aligned to global and European markets and move the milk price they receive onto a more equal footing with other EU producers.

The proposal will be subject to approval by Milk Link Members, the Arla Foods amba Board of Representatives and relevant regulatory authorities.

In the past few hours, NFUS has had private conversations with Milk Link and Arla Foods UK to discuss the deal.  Commenting on the news, NFU Scotland Milk Policy Manager George Jamieson said:  “NFUS has spoken to both Milk Link and Arla executives and will have further discussion to fully understand the agreement, but we believe that this type of initiative is needed to move the UK dairy sector forward.

“NFUS supports strong well invested farmer owned co-ops, investment in innovation and processing capacity and developing new markets to allow the UK dairy sector to be competitive in the growing global dairy market.

“In that regard, this initiative by Arla and Milk Link is highly significant and has real potential to deliver benefits to those farmers directly affected, and also benefit the wider dairy sector in the UK. Crucially, it is our understanding that Milk Link members will, following a transition period, be subject to the same pricing regime as their European counterparts. In Europe, the co-ops tend to lead on milk price, and have consistently delivered prices higher than those seen in the UK for the vast majority of the last decade.

“In a Scottish context, the proposals potentially herald exciting prospects for the processing site at Lockerbie where there has already been a significant level of investment recently.  Milk Link and Arla UK are already producing liquid milk, cheese and butter at Lockerbie, and the proposal presents a tremendous opportunity to turn Scottish milk into an impressive array of products for home and overseas consumption.

“There will be no immediate change to the status of those currently involved in supplying milk, via the Arla Foods Milk Partnership (AFMP), to Arla UK for the fresh milk market.  However, the proposed tie up between the parent company Arla Foods amba and Milk Link will stimulate further discussion on whether producers supplying AFMP, a group that involves Scottish dairy farmers, will also become full co-operative members in the future.” 

Ends

Contact Bob Carruth on 0131 472 4006

Date Published:

News Article No.: 49/12


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