Two Finnish dairy co-ops merge to become largest shareholder of Valio

The merger will make the new co-operative the largest shareholder of Valio, the country's biggest dairy business.

Finnish dairy co-ops ItäMaito and Maitosuomi are merging to create a stronger enterprise.

ItäMaito Co-operative and Maitosuomi Co-operative are shareholders in Valio, the country’s largest dairy business. The merger will make the new co-operative its largest shareholder, with 42.7% of Valio’s 48,861 shares and about 900 million litres of milk – almost half of the entire volume received by Valio from co-op members.

Valio is the leading player in the Finnish dairy sector, with a 43% market share. It collects around 80% of Finland’s raw milk from eight dairy co-operatives.

The new co-op will be named Osuuskunta Maitosuomi (Maitosuomi Co-operative) and will be based in Lapinlahti.

The two co-ops say the merger will help make better use of resources and improve services for members, who benefit from advice in both Finnish and Swedish.

Maitosuoma includes more than 1,100 milk producers while ItäMaito has 1,600 members.

The new co-operative would start operating in early September 2019 after elections to choose members for its new co-operative assembly. A transitional board will be leading the new entity until then.

Eas Kotala, chair of Maitosuoma co-op, said the number of dairy farms has been declining in Finland by 5-7% each year.

“By merging, we will strengthen our operations and ensure the co-operative will continue to provide services in the future. Advise and expert support can improve the co-ops and provide more effective services to member entrepreneurs. The big unit can offer specialised assistance.”

Chair of the board ItäMaito, Mikko Heikkinen, added that the new co-operative covered an extensive part of Finland’s best milk production areas.

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