Arla Foods - owned by around 13,500 dairy farmers across Sweden, Denmark, the UK, Germany, the Netherlands, Belgium and Luxembourg - yesterday announced it has agreed to sell its 49% interest in Walhorn AG to Lactalis, which currently owns a majority 51% stake in the Belgian joint venture.
Walhorn AG produces milk powder, liquid milk products and cream at its plant in Walhorn, East Belgium.
Arla inherited its 49% stake in Walhorn AG in August 2014 when it merged with Eupener Genossenschaftsmolkerei Walhorn (EGM Walhorn), a Belgian cooperative owned by around 800 dairy farmers across Belgium, Germany and the Netherlands.
"Since then, Lactalis and Arla have engaged in a dialogue about the future of Walhorn AG, and an agreement has now been reached for Arla to sell its legal shares in Walhorn AG to Lactalis on June 30 2015," said Arla.
The majority of the 550m kg of milk produced by EGM Walhorn's 800 farmer owners each year is currently supplied to the joint venture.
This agreement will continue for another year, Arla said.
"The existing milk delivery agreement between both parties will continue with all rights and obligations until the end of June 2016," it said.
"After expiry of the agreement Arla Foods and Lactalis will make another agreement in which Arla Foods takes the obligation to deliver 100m kilograms milk per year to Walhorn AG."
Much of what's left - approximately 450m kg of milk - will be delivered to it's plant in Pronsfeld, Arla spokesperson, Theis Brøgger, told DairyReporter.com.
"Mainly its going to go to Pronsfeld in Germany, where we have a big dairy site," said Brøgger. "Most of the milk Arla collects in the region ends up at that location."
"We're happy with this agreement," he added. "It allows Lactalis to take full control of production and secures milk for Arla."