Arla Foods expands through merger in Germany and closes a factory in Denmark

Hansa-Milch and Arla Foods to merge

The members of the two cooperatives approved the proposed merger on March 2nd.

Hansa-Milch Mecklenburg-Holstein eG will be known as Hansa Arla Milch eG from now on. It remains a cooperative entity with its own members, and joins Arla Foods amba in that capacity.

Hansa Milch, based in northern Germany, has approx. 400 employees and is owned by around 1000 cooperative members, of which 670 are active milk farmers; every year, it processes around 700 million kilogrammes of milk at its site in Upahl, in western Mecklenburg.

Under the merger of the two cooperatives, the Hansa Arla Milch eG farmers will be given a milk purchase guarantee from Arla Foods with no time restriction. In addition, Arla will assure Hansa-Milch eG of a milk payment price calculated on the same basis as is used for its Danish and Swedish members.

“In previous years, the price we paid for milk was generally higher than that given by Hansa-Milch. This means that Hansa Arla Milch eG members can expect a higher price in future,” says Peder Tuborgh, CEO at Arla Foods amba.

The Arla Foods strategy includes paying members the highest possible milk price. “To achieve this objective, we need to continue to grow in Europe, and particularly in the important German market,” explains Tuborgh. “Together with Hansa Arla Milch, our aim is to be one of the top three German dairy companies.”

Source: Arla press release

Arla closes Hirtshals Dairy

Arla acquired the dairy in 2009, and only 26 months later decided to close it because of declining sales. Friday the 15th April will be the last working day for the 15 employees at Hirtshals Dairy.

In a press release, Arla blamed the economic crisis and the tendency of consumers to purchase discount rather than branded products.

Arla took over the previously independent cooperative dairy in 2009 and later fired nearly two thirds of the employees. At that time then steward Morten Holm, feared it would be difficult for the group to keep up production at the dairy. And unfortunately this has proven to be true.

According to the press release, Arla will try to redeploy the sacked employees, and NNF secretary Poul Erik Faarkrog will hold them to it.

“NNF will now do everything we can to help the 15 colleagues. Whether it’s training, outplacement or anything else, we’ll do whatever it takes,” he says.

Source: NNF news