The process of rationalisation is gethering pace in the UK, with co-operatives Zenith Milk and the Milk Group announcing their intention to merge and Scandinavian co-op Arla Foods launching a takeover bid for processor Express Dairies.
At a farming conference in London, meanwhile, UK agriculture minister Margaret Beckett hinted that the Competition Commission might relax its rules, allowing larger dairy companies in the UK.
Zenith Milk and the Milk Group announced their plan to the Semex conference in Glasgow. If the merger is successful, the new company will control around 19.5% of raw milk supply in England and Wales, making it the largest supplier there.
Zenith Milk, which is based in the north of the UK, has made no secret of its expansion plans since its creation in 2000 as one of the three companies to take over from the disbanded Milk Marque.
The Milk Group has been trying to add value to producers’ milk in recent years by moving into the processing sector. The company is a logical partner for Zenith, with members mainly in central, southern and south western England and the Welsh borders.
Members of each co-operative will vote on the merger at the end of April, with the deal expected to go through in May. A spokesperson for Zenith told Dairy Industries International that feedback from members was “very positive”.
It also emerged in January that Scandinavian milk giant Arla Foods had put a