Westminster Dairy Group Chair Welcomes Milk Merger Talks
12/10/07

Chairman and founder of the All Party Parliamentary Group for Dairy Farming, Daniel Kawczynski MP (Shrewsbury and Atcham) has welcomed the recent announcement that dairy cooperatives First Milk and Milklink are in the advanced stages of merger talks.

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Mr Kawczynski commented, “the Parliamentary Group has been seeking consolidation within the milk production sector, as a positive step towards controlling the power of the supermarkets over the British dairy industry. I am delighted that Milklink and First Milk are looking so seriously at the possibility of a merger that would create a strong and sustainable future for milk production in this country.”

The cooperatives are owned by over 4,000 dairy farmers in England, Scotland and Wales and would have a turnover of around £1 billion per year from the processing of 3 billion litres of milk into a wide range of dairy products, including cheese, cream and custards.

“The merger would not only allow the cooperatives to negotiate with the UK supermarkets from a position of greater strength,” added Mr Kawczynski, “but would also allow them to compete in the global marketplace. The merger will require the approval of the Office of Fair Trading, but I am hopeful that it will be permitted as the Parliamentary Group has discussed the matter at some length with the OFT over the past eighteen months and they indicated consolidation in the dairy sector is allowable.”

Following a period of due diligence, the boards of the two cooperatives will recommend whether to proceed with a merger, which would be subject to approval by their members and the Office of Fair Trading.

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