Dairy co-op Arla Foods is merging with Swedish co-op Gefleortens. The deal, approved by the country’s competition regulator, will secure an increased presence for Arla in the country.
Sweden’s oldest dairy business, Gefleortens includes 59 farmer members who supply milk to the co-op and first started business in 1933 by 17 small local dairies.
Based in the city of Gävle, the local co-op sells milk, yoghurt and cream. Following the merger, the co-op will keep open its facility in Gävle and retain its current staff.
Arla, owned collectively by over 11,200 dairy farmers in Sweden and Northern Europe, is the largest producer of dairy products in Scandinavia. The co-op’s history goes back to the 1880s when farmers in Denmark and Sweden formed small co-operatives to invest in joint dairy production facilities.
In 2000 Arla became the first cross-border dairy co-operative following the merger of Swedish Arla ekonomisk Förening with MD Foods in Denmark. Since then it has continued to merge with various dairy businesses and is now operating across Europe as well as the USA, Russia, Canada and China.
Thomas Lundgren, chair of Gefleortens, said: “Of course, I’m both happy and relieved to hear the Competition Authority’s message. Our goal has always been to ensure stable and long-term conditions for the milk production of members while ensuring that the brand and dairy continue to develop. I hope and believe that even our customers and consumers see that this is the best thing that could happen to us at the moment.”
As part of the merger, Arla will take over the brand and operation of the plant in Gävle.
Those who apply for membership in Arla will receive Arla’s milk prices from 1 December, which is currently higher than the price Gefleortens pays.
Åke Hantoft, chair of Arla Foods, added: “We at Arla constantly work to develop the dairy market, wherever we are. We also see a need for more Swedish milk raw materials in the coming years of both Arla Milk and Arla Organic Milk. The merger with Gefleortens will play an important role in meeting this ambition.”
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