European Business News – Week ending June 10, 2011

 Breaking News
  • Heineken’s Acquisition of Punch is Cleared The Competition and Markets Authority (CMA) has accepted proposals by Heineken to resolve concerns over its £402.7 million acquisition of Punch Taverns, one of the UK’s largest leased pub companies, with a portfolio of more than 3,500 pubs nationwide. In June, the CMA said that Heineken’s proposed purchase of part of the Punch Taverns estate [...]...
  • Changing Consumer Tastes Drive Long-term Global Sugar Market Slowdown The consumers’ shift away from sugar consumption is an important driver behind significant changes in the food and beverage industry. These changes will have long-term ramifications, including a likely slowdown in the worldwide sugar market, according to the latest report of Rabobank ‘Sweetness and Lite’. A combination of changing preferences, product reformulations and government pressure have [...]...
  • How is the Rise of E-Commerce Changing the Role of Physical Stores? The rise of the internet has allowed retailers to directly connect with consumers from beyond the physical store revolutionising the competitive space more than ever. The world recently saw the acquisition of Amazon and Whole Foods which sent shock waves through the retail industry. This unforeseen merger has put retailers under pressure more than ever [...]...
  • Younger British Consumers Turn Over a New Leaf on Tea New research from Mintel reveals that as many as 37% of British consumers aged 25-34 have drunk 5-6 different types of tea at home or in the workplace over the past month*, compared to just 3% of those aged 55+. Furthermore, Brits aged 25-34 are the most likely to drink every variety of tea tracked by [...]...
  • Irish Consumer Confidence Hits New High Consumer confidence in Ireland has hit its highest level since the recession and is now the fourth most confident country in Europe, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions. The Republic of Ireland’s Consumer Confidence Index score – which measures attitudes each quarter on topics including personal finances and job prospects [...]...
  • Fifth Acquisition For Frutarom in 2017 Frutarom Industries, one of the world’s 10 largest companies in the field of flavours and natural specialty fine ingredients, continues its momentum of acquisitions and the implementation of its rapid and profitable growth strategy by agreeing to purchase of 100% of the shares of the UK company Flavours and Essences (UK) Ltd (F&E) for approximately [...]...

European Business News – Week ending June 10, 2011

June 12
11:08 2011

European dairy groups dominated the business news during the past week. Fresh from its acquisition of North German dairy co-operative Hansa-Milch, Arla Foods entered merger talks with fellow Scandinavian farmers co-operative Milko, which is one of the biggest dairy companies in Sweden. Milko has been struggling for some time and faces future liquidity issues.

Peder Tuborgh, chief executive of Arla Foods.

A merger with Arla Foods would provide Milko’s members with greater security and a better milk price as a consequence of being part of one of the world’s largest dairy groups. It would also bolster dairy farming and milk production in Sweden, which are in decline with the number of dairy cows falling by 50% since 1985.

Arla Foods recently allied with DMK, its German counterpart, to established a 50/50 joint venture business, ArNoCo, to invest Eur44 million to process whey for the global food manufacturing industry. With sales of about Eur4 billion and 5,500 employees, DMK was created in May following the merger of Nordmilch and Humana and to form Germany’s biggest dairy company and the sixth largest in Europe.

Lurpak is one of Arla Foods’ three global brands.

Of course, Arla Foods is the result of the merger of two dairy co-operatives – Arla of Sweden and MD Foods of Denmark – in 2000. Sweden and Germany are two of Arla Foods’ six core markets. The other four are the UK, Denmark, Finland and the Netherlands.

UK Developments

In the UK, Arla Foods has been developing closer links with the two main British dairy co-operatives – Milk Link and First Milk – by entering a joint venture with them at Westbury Dairies. Westbury Dairies is the UK’s most modern skimmed milk powder and bulk butter production facility and plays an important role in providing the key balancing capacity necessary for the British dairy industry to meet its annual peaks in production, and in maintaining a more stable market for farmers’ milk.

Arla Foods is planning to manufacture retail packet butter at Westbury Dairies, from August 2011. However, all is not plain sailing for Arla Foods in the UK. Its proposed £150 million new dairy at Aylesbury in the south of England is meeting increasing opposition from local people in the area.

Strong Performance by Milk Link

Milk Link announced its full year results during the week. Despite very challenging economic and trading conditions, Milk Link performed strongly, increasing both sales and profits, and the proportion of milk it processed. Milk Link processed 58% of the 2.5 billion litres of milk it handled last year through its own production facilities – up from 54% in the preceding year – as it continues to seek to deliver improved returns to its members.

Carl Ravenhall, formerly the managing director of Adam’s Foods – the Irish Dairy Board’s UK operation, is due to take up a senior executive position with Milk Link.

Milk Link is benefiting from its drive for greater efficiencies and productivity across its operations. It has also been active on the M&A front. Milk Link recently strengthened its position as a leading producer of British cheeses by acquiring the Cornish Country Larder soft cheese business for a total consideration of £7.1 million. The dairy co-op has also formed a strategic partnership with Volac to jointly undertake a joint £12 million investment to create a state of the art, added value whey processing operation. The new facility will be the most advanced of its type in the UK. The move is part of Milk Link’s strategy to increase the proportion of its value added business, so reducing exposure to the vagaries of the commodities markets.

Fellow dairy co-op First Milk has also just consolidated its presence in the UK and international cheese markets by purchasing Kingdom Cheese and Kingdom Dairies, both based in Scotland.

Swiss dairy group Emmi is continuing its international expansion.


Later in its current financial year, Milk Link intends to restructure into two business units: Milk Link – Cheese and Milk Link – Milk. The move is intended to allow Milk Link to place greater focus on growing its core businesses while at the same time moving forward with the next stage of its development strategy. It has also strengthened its management team by recruiting Carl Ravenhall, formerly the managing director of Adam’s Foods – the Irish Dairy Board’s UK operation, who is due to take up a senior executive position with Milk Link by late summer.

Emmi Expands International Business

In the past week, Swiss dairy group Emmi continued its international expansion with the acquisition of A-27, an Italian premium desserts producer which owns the Bonta Divina brand, for an undisclosed sum. The acquisition allows Emmi to further consolidate its position as a provider of high-quality branded products outside Switzerland.

Emmi’s international activities are focused on its key markets of Italy, Germany, the UK, Benelux, Austria and the US. Late last year, Emmi significantly strengthened its position in both the UK and Germany with the acquisition of the global rights for the Onken brand from Dr Oetker for an undisclosed sum.

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