FrieslandCampina and Milcobel are gearing up to officially join forces after securing approval from the EU’s competition authority.
On December 16, the two co-ops will vote on a deal that would see Milcobel absorbed into FrieslandCampina. This will see Milcobel’s members adopt the Dutch co-op’s structures and milk pricing methodology while the Belgian co-op’s business groups will be integrated into FrieslandCampina’s seven divisions.
Following the merger, FrieslandCampina will become a 16,000-member organization with annual revenues of about €14bn and a milk volume of roughly 10 billion kilograms.
The co-op will bolster its position in key markets such as consumer cheese, mozzarella and ingredients, and achieve economies of scale, improve cost efficiency, and unlock investment in sustainability and product innovation.
So what else is in the proposal that the two co-ops will vote on?
From cost efficiency to sustainability payments
With suppliers across the Netherlands, Belgium, Germany and France, the two co-ops are poised to achieve significant operational efficiencies by optimizing their joint production network.
For example, combining Milcobel’s six Belgian plants with FrieslandCampina’s network may allow for better allocation of production capacity and reduced duplication.
Larger purchasing volumes for raw materials could further reduce unit costs meanwhile, and there is scope for a more efficient milk collection system, given the geographical proximity of the co-op’s supplying farmers.
There are also clear synergies around value-added products. Milcobel is known for its mozzarella, which is in high demand globally and projected to grow by in the range of 4-6% CAGR globally in the next decade. That bodes well for FrieslandCampina, which can leverage its international network to strengthen exports.
For Milcobel’s farmers, there’s also the potential to earn a ‘merger bonus’ for staying within FrieslandCampina. According to the proposal, current Milcobel farmers who remain members three years after the merger will be in for a payment of €8 per 100 kg of milk supplied.
Sustainable dairying is also in sharp focus: both FrieslandCampina and Milcobel operate their own sustainability programs, so integrating the latter’s farmers into the former’s ‘eco’ system is a crucial part of the merger puzzle.
According to the proposal, after the merger, there will be a two-year transition period to align Milcobel’s system with FrieslandCampina’s planet program, Foqus. During this time, Milcobel farmers will receive a guaranteed sustainability premium of 0.85 €/100 liters of milk until they fully adopt Foqus planet.
Under Foqus, farmers can earn premiums for actions such as emissions reduction and pasture grazing. In 2025, farmers earned €3.50 per 100kg of milk minus co-op deductions.
Overall, the merged organization should be a more resilient business, which would reduce risk for producers. This, in turn, should support a stronger milk price in the long run.
