Wiseman cleared for Milk Link deal in UK

By staff reporter

- Last updated on GMT

Related tags: Milk, Arla foods, Arla foods uk, Robert wiseman

Britain's competition watchdog has cleared dairy firm Robert
Wiseman to take over the liquid milk business of rival group Milk
Link, as the industry continues to consolidate.

The Office of Fair Trading said it would not refer the deal, worth £5.5m, for investigation by the Competition Commission.

The endorsement clears the way for Wiseman to further build up its liquid milk business in the south west of England.

The deal will land it Milk Link's Milk Processors and Newlands Farm businesses, which together sell around 32m litres of milk per year.

The acquisition, which also follows Wiseman's acquisition of Definitely Devon's milk division, shows how cost pressures on the UK dairy industry have made consolidation a high priority.

"We remain focused on efficiency and the need to minimise food miles and this acquisition complements our plans to open a new dairy in Bridgwater, Somerset in autumn 2007,"​ said chief executive Robert Wiseman.

He said the group's distribution reach now stretched across the UK, from Cornwall to Caithness in Scotland. Wiseman already supplies nearly a quarter of Britain's liquid milk.

Dairy officials have predicted for some time that low earnings across the dairy supply chain will make more consolidation necessary.

Soaring input costs and recent supermarket price cuts on milk have intensified the margin squeeze on Britain's dairy processors, which have in turn cut prices paid to farmers.

Wiseman was the only one of the 'big three', also including Dairy Crest and Arla Foods UK, to record a profit rise in its recent full year results, although it failed to regain ground already lost in 2004.

The firm said in a recent trading statement that sales were up two-and-a-half per cent in its first quarter thanks to a new milk supply contract and continued branded milk growth.

Related topics: Manufacturers, Fresh Milk

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