Vive le fromage as French dairy groups unite

By Neil Merrett

- Last updated on GMT

Related tags: Europe, European union, France

Two of France's largest dairy firms yesterday agreed to form a
joint venture in a move to adapt to the effects of
EU reforms on the country's cheese production.

Sodiaal and Bongrain will merge their production facilities and staff linked to their cheese brands, in a move it claims will boost the products and services it can offer consumers. Such a merger is a response to the significant upheavals in the EU's dairy sector as a result of reforms to the EU's Common Agricultural Policy (CAP). The reforms have affected prices and supply. The Sodiaal and Bongrain joint venture, which will be managed equally by the two compaines. It combines the companies' respective cheese subsidiaries, Fromageries Riches Monts and la Compagnie des Fromages. The combined operations will result in the compaines sharing control of a number of the country's leading cheese labels including Sodiaal's RichesMonts and Le Rustique brands, and Bongrain's Coeur de Lion. In a statement the companies stressed that their combined potential was vital to preserving the country's dairy production in an expanded EU market place. France's economic power has waned in recent years against rival markets in Western Europe. Confidence in the country's manufacturing abilities has also undergone a decline. The result has been that about two-thirds of French consumers expect their buying power to fall over the next few years. Spending on food items dropped by 30 per cent alone last year, according to a recent survey of 1,000 consumers by respected French magazine, LSA​. However, the same survey also found that a victory for Nicolas Sarkozy in the French presidential election may boost buying confidence. Sarkozy was last month duly elected on a mandate for radical change, although many French people are taking a "wait and see"​ approach.

Related topics: Markets

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