The Royal Association of British Dairy Farmers has welcomed the proposed merger of Arla Foods amba and Milk Link, claiming it will strengthen UK dairy producers’ positioning and their resilience to global price pressure.
The Royal Association of British Dairy Farmers has welcomed the announcement of Arla Foods amba and Milk Link’s proposed merger, saying the collaboration of the two co-operatives will strengthen UK dairy producers’ positioning and their resilience to global price pressure.
The association believes the news could prove to be a catalyst for further radical restructuring within the UK processing sector.
“The merger has to be good news for every Milk Link member and that includes myself,” said RABDF chairman David Cotton, who himself farms a 200 cow herd near Glastonbury. “Being part of what is destined to become the largest player in the UK dairy market will strengthen members’ positioning and contribute to ironing out price volatility.
“Milk Link members’ farm gate price will no longer be reliant on what the co-op can get out of the UK marketplace, but what Arla Foods can derive from the global pool. The merger will also create more export opportunities for Milk Link, thereby improving the industry’s reliance to price pressure.”
Mr Cotton also confirmed that, as a result of the merger, Milk Link members will be entitled to the same profit share as Arla Foods amba members, while any fears over currency exchange issues had been allayed by the introduction of an automatic formula.
Mr Cotton also predicted that the announcement could lead to more major changes within the UK processing sector before the end of the year.
“This merger could prove to be a catalyst for further radical restructuring as processors will start to review how their businesses have been repositioned overnight,” he said.