Snapping up organic milk

Arla purchases Yeo brand rights

Yeo Semi Skimmed and organic 2l

SCANDINAVIAN dairy giant Arla Foods Limited is in the process of purchasing Yeo Valley Dairies Limited – a subsidiary of the Yeo Valley Group – in a transaction that is expected to give Arla the rights to use the Yeo brand across milk, butter, spreads and cheese.

The deal, which is still subject to approval from the Competition and Markets Authority, has been touted by both parties as an opportunity to drive growth in the UK’s organic market, the space in which British firm Yeo Valley operates and an area where Arla has expansion ambitions.

Tomas Pietrangeli, managing director at Arla Foods, said: “Our ambition is to encourage customers to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories.

“Organic milk has a key role to play as consumers increasingly look for ways to make their diets healthier. Its production without the use of artificial or manufactured herbicides and fertilisers and with high standards of animal welfare are key reasons it is in growth, especially with younger consumers.”

Yeo Valley boss Tim Mead said of the deal: “Arla’s farmer-owned credentials are aligned to the values and ethos that the Yeo Valley brand is based on – ‘supporting British family farms’. We have a long-held ambition to grow organic dairy in the UK, because at Yeo Valley, we believe that organic dairy is better for the planet, for the cows and for health.”

• Arla Foods’ acquisition of the Yeo Valley Dairies business  followed swiftly on from an announcement from the firm that it plans to invest £72m in the UK this year.

As part of the investment, 10 of Arla’s 12 sites across the UK are expected to receive investment in upgrades.

Arla’s site in Aylesbury, Buckinghamshire, will receive the largest investment with £33.6m earmarked for transition to the production of Arla’s lactose-free dairy products.

Processing facilities at Arla’s Lockerbie plant will also benefit from a £5.5m investment.

Other sites are expected to benefit from new, expanded and improved production capacity.

Tomas Pietrangeli said: “Arla is the biggest dairy company in the UK, owned by 11,200 farmers across Europe. This investment is almost double the investment of last year and, with the exception of building the Aylesbury dairy, it is the biggest annual investment for Arla in the UK.

“While milk prices remain volatile and Brexit brings both uncertainty and opportunity, Arla farmers in the UK and across Europe are committed to continually investing in our UK business to maintain pace with the demand for nature’s original superfood, and the consumer choice it creates.”