Arla Foods acquires certain businesses from Yeo Valley in UK

Arla Foods, a subsidiary of Danish dairy cooperative Arla has partially acquired UK-based Yeo Valley Dairies for an undisclosed price.

Yeo Valley Dairies is a subsidiary of the Yeo Valley Group.

Under the deal, Arla Foods will be able to use the Yeo Valley brand’s butter, spreads, cheese, and milk in the UK market.

Completion of the transaction is subject to the approval of the UK Competition and Markets Authority (CMA).

Arla Foods Europe head and executive vice-president Peter Giørtz-Carlsen said: “The potential for organic dairy products in the UK is significant, and our investment in range through this licensing agreement with Yeo Valley provides a significant opportunity to offer a greater choice to consumers at attractive prices.

“Our ambition is to encourage customers in the UK to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories.”

The deal does not include Yeo Valley yoghurt, ice cream, cream, and desserts businesses and will continue to operate independently through Yeo Valley Group, which remains under the ownership of the Mead family.

By acquiring certain businesses from Yeo Valley Dairies, Arla Foods intends to significantly step up its ambitions for the organic dairy business in the UK.

According to the company, only 4% of milk sold in the UK fresh milk market is organic, which is much lower when compared with other European countries such as Germany (10%), Sweden (16%), and Denmark (29%).