A further 1,600 British farmers could become co-owners of Arla Foods amba in the latest stage of the company’s post-merger integration of Milk Link.
The roadmap, announced today, involves different proposals for different groups of Arla and Milk Link farmers, and could take the total number of Arla co-owners in the UK to 3,200.
“Arla Foods amba is owned by farmers and run for the benefit of farmers. There is a natural alignment of our interests with the existing dairy farmer owners”
Jonathan Ovens
Arla said the move would strengthen its co-operative status in the UK. “I’m delighted that we have agreed the terms of the roadmap which offer circa 1,600 farmers the benefit of joining a major European co-operative that consistently pays one of the highest milk prices and a share of the profits,” said Jonathan Ovens, chairman of Arla Foods Milk Partnership (AFMP) and Milk Partnership Limited.
“This move takes our ambition to the next level by providing the security of a milk price determined by European and world markets, from a well-balanced, well-invested, farmer-owned business, which has access to the global marketplace and operates across all dairy categories.”
He added: “Quite simply, Arla Foods amba is owned by farmers and run for the benefit of farmers. There is a natural alignment of our interests with the existing dairy farmer owners. I will be joining and I hope that fellow members will choose to join too.”
Arla’s merger with Milk Link was completed in September 2012.
Milk Link conditions
At the same time as today’s announcement, Arla Milk Link and Arla Foods amba also announced changes to the Arla Milk Link merger conditions.
As part of the changes, from 1 January 2014 Arla Milk Link members will receive Arla Foods amba’s supplementary payment two years ahead of schedule in early 2015, on milk supplied during 2014.
“This is an extremely important milestone for the development of Arla’s business in the UK,” said Johnnie Russell, director of Arla Milk Link and Arla Foods amba. “The original agreement with Milk Link, which allowed for a three-and-a-half year transition period to full membership, was negotiated on the basis of a historic performance price gap which does not currently exist, given the strong business performance in the UK since the merger in 2012.
“This will be welcome news for Arla Milk Link farmers and further emphasises the benefits of Arla amba membership.”
All existing suppliers of AFMP, Arla direct and Arla Milk Link direct will be invited to take up the offer of ownership and current Arla farmers have until 15 November to confirm their intention. Both proposals require the approval of Arla Foods amba’s board of representatives.
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