The agreement is expected to generate sales of the product, currently only available in Finland and Switzerland, in new markets around the world. Valio is expecting quick results thanks to Tetra Pak's global sales network.
It is also hoping to benefit from markets where lactose intolerance, or a diminished ability to tolerate milk sugar, is significantly more common than in Finland, such as in central and Southern Europe, Asia and Africa.
The product will however go head-to-head with soy milk, also consumed as an alternative to milk and currently experiencing rapid growth in Europe and other regions thanks to its health benefits. Fermented milk, which has been shown to eliminate or drastically reduce symptoms related to lactose intolerance, could also be a rival product.
The food intolerance and allergies market has experienced rapid growth in recent years, with a recent report from Mintel predicting that it will more than double in value by 2007 reaching £138 million (€202m) in the UK alone.
Valio claims its patented process produces lactose-free dairy products that are completely different to the lactose-free milks available outside Finland, resulting in a lactose content lower than 0.01 per cent and none of the slightly sweet taste inherent in low-lactose milks.
The product was first launched in Finland in 2001 and in May 2004, Valio launched a lactose-free skim milk drink. The first lactose-free milk drink outside Finland produced using Valio's technology was launched in Switzerland at the beginning of 2004.
Under the new arrangement, Valio and Tetra Pak will be separately responsible for agreements with those who purchase the technology. Valio will license the membrane technology manufacturing process to customers and Tetra Pak will deliver membrane filtration equipment and engineering.