Arla Foods has announced plans to acquire Yeo Valley Dairies, allowing the cooperative company to expand its organic dairy business in the UK.
The deal will give Arla Foods the rights to use the Yeo Valley brand in the UK market for milk, butter, spreads and cheese.
However, the Yeo Valley yoghurt, ice cream, cream and desserts business will continue to be run indepedently through Yeo Valley Group, which remains under its original family ownership.
"The potential for organic dairy products in the UK is significant, and our investment in range through this licensing agreement with Yeo Valley provides a significant opportunity to offer a greater choice to consumers at attractive prices," said Peter Giørtz-Carlsen, executive vice president and head of Europe in Arla Foods.
"Our ambition is to encourage customers in the UK to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories.”
Arla says that currently in the UK, only 4% of fresh milk sold is organic, compared to 10% in Germany, 16% in Sweden, and 29% in Denmark.
"We [are taking] a determined step to make organic dairy products more available to UK consumers as we believe that organic milk has a key role to play as consumers increasingly look for ways to make their diets healthier and more natural," added Giørtz-Carlsen.
Expansion Plans
Elsewhere, Arla Foods Ingredients has agreed to acquire SanCor's shares in Arla Foods Ingredients SA (AFISA), to support the company's ambition for market growth in South America.
Argentinian dairy cooperative SanCor has agreed to sell its 50% stake in the business, after a 17-year partnership with Arla.
"SanCor and Arla Foods Ingredients have agreed amicably that it is now time to move forward with our businesses separately," said Henrik Andersen, senior vice president of Arla Foods Ingredients.
"For Arla Foods Ingredients this is a unique opportunity for continued strategic growth in our whey business in general and specifically in South America, and AFISA will become a significant element in Arla Foods Ingredients’ global supply chain.”
Last month, Arla Foods announced plans to invest €527 million in 2018, with a focus on larger and improved production capacities, as well as innovative new technologies.
“This investment is a growth plan aimed at expanding our positions in key dairy categories and geographic markets where Arla is already a key player,” said Peter Tuborgh, CEO of Arla Foods.
“Our ambition is to create an even stronger foundation for our farmer owners and our future business growth.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
