Arla merges UK milk supply co-ops

Milk buyer and processor Arla Foods has merged its two UK farmer supply groups into a single body effective from January 1st.

The company has merged the Arla Milk Link (AML) and Arla Milk Cooperative (AMCo) groups into a single co-operative body called the UK Arla Farmers Cooperative (UKAF). This is the last detail of Arla’s acquisition of the Milk Link business in October 2012 – at the time Arla This is the last detail of Arla’s acquisition of the Milk Link business in October 2012 – at the time Arla said that Milk Link members would become part of Arla Foods after a transitional period, “enabling them to achieve the same level of return as enjoyed by existing Arla owners”.

 The merger has been approved by Arla’s board of representatives, Arla’s UK farmer owners and the regulatory authorities.  UKAF becomes the single UK corporate member of Danish parent Arla Foods amba, with the same rights within Arla Foods amba as the two former co-operatives. It will be jointly chaired by Arla Foods amba UK farmer board directors Jonathan Ovens and Johnnie Russell.

The merged body has 2,700 dairy farmers or some 25% of the British herd, while the whole Arla group has 12,700 farmer owners across all its European markets. All members will be paid through Arla’s Common Payment model from this month, with a simplified payment structure offering one of two pricing schedules – either a manufacturing or liquid schedule.  Arla says this payment model facilitates its philosophy of one milk price for all owners, regardless where they farm in Europe.

“The creation of a single UK corporate member of Arla Foods amba, rather than the two we had previously, will further unite and strengthen the voice and influence of Arla’s UK farmer owners in Arla’s board of representatives and board of directors, “ says Mr Russell.  “It will simplify and align the UK structure within Arla Foods amba and, importantly, it fulfils the commitments made by both AMCo and AML to create one corporate member in the UK.”

Mr Ovens adds:  “Bringing together AMCo and AML represents an important and strategic step for British dairy farmers who supply their milk to Arla Foods. The terms of members existing milk contracts will not change as a result of the merger but new rules have been adopted, along with a new democratic structure to ensure that the needs of all 2,700 UK farmer owners are met.  The adoption of the new rules will maximise efficiency within member services because we now have just one set of rules and for a more aligned way of dealing with all UK members.”

Posted on January 11, 2016 .