OFT clears First Milk and Adams Foods cheese deal

First Milk and Adams Foods have been given the green light for their cheese supply deal by the Office of Fair Trading.

The competition regulator announced on Monday (3 February) it had cleared the deal, which will see Adams take control of packing and marketing First Milk’s hard cheese. The full text of its decision will be published shortly.

The deal had not been expected to cause competition concerns, and both First Milk and Adams welcomed the OFT’s decision. “Having received the OFT approval, we will now be working to finalise the deal,” a spokesman for Adams Foods added.

Adams and First Milk announced their intention to form a strategic partnership at the end of October. Under the 10-year deal, Adams will buy at least 50,000 tonnes of First Milk-produced Cheddar a year, and cut, package and market it to UK retail, wholesale and foodservice customers. First Milk will continue to sell and market its own cheese for export markets.

In mid-October, First Milk announced plans to close its Maelor packing plant in Wales after losing a major Cheddar contract with Asda to rival dairy co-op Arla. However, it said the deal with Adams had already been in the works long before the loss of that contract.

“It absolutely didn’t change what we were trying to get to. The timescale wasn’t accelerated, slowed or changed in any way,” First Milk CEO Kate Allum told The Grocer at the time.

Adams CEO Ian Toal said at the time the deal would allow Adams – which is owned by the Irish Dairy Board – to shore up its position in British-made Cheddar. “It demonstrates our continued commitment to supporting the UK cheese market and to meeting the needs of our growing customer base.”

Adams has reassured its Irish cheese suppliers that the tie-up with First Milk will not affect the amount of Irish Cheddar it buys.