"A Perfect Match": Arla Foods UK CEO Peter Lauritzen and Milk Link Chief Executive Neil Kennedy on the Creation of a Dairy Giant

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May 31, 2012, 08:39 ET

BROMSGROVE, England, May 31, 2012 /PRNewswire/ --

"Two strong businesses together make an even stronger business," Milk Link CEO Neil Kennedy insisted during a joint interview with Arla Foods UK CEO Peter Lauritzen as he discussed the proposed merger between the two groups.

Last week, Arla Foods revealed plans to merge with UK dairy farmer co-operative Milk Link. If approved, the deal will create the largest dairy group in the country with the capacity to process 3bn litres of milk per annum, control of about 25% of the UK's milk production and a turnover in excess of GBP2bn (US$3.16bn).

"Our aim is obviously to be an effective supplier but at the same time to deliver competitive returns. I think you do that by being efficient, you do that by building brands, you do that by creating differentiation value. And I think the combined business is better placed to do all these things," Kennedy remarked.

Speaking to just-food, Lauritzen and Kennedy claimed the merger would bring the companies and their farmer owners a variety of benefits.

Kennedy believes that through greater scale and backed by Arla's financial clout Milk Link members will be better positioned to contend with global competitors. He said: "The competitors we have as farmer owners - large scale businesses like Danone and Muller and Nestle - are global either private or PLC businesses we are having to compete with and we need to be able to have the scale and the investment to match".

For its part, Arla will fill in the white space in its product portfolio through Milk Link's cheese capabilities.

"We have been missing the traditional English cheeses like cheddar. This will certainly be a benefit for us. That is why the merger is a perfect match," Lauritzen said.

Hinting of things to come, Lauritzen added that Arla plans to keep up its high level of investment and suggested that some of Arla's brand building know-how could be extended to Milk Link's cheeses.

Both Kennedy and Lauritzen are backing the proposed plans as they are put before the cooperatives farmer shareholders for ratification.

Read more on just-food.com for the full joint interview with Arla and Milk Link.

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