Arla Foods and AFMP ready to define roadmap for membership of the cooperative

Arla Foods amba and Arla Foods Milk Partnership (AFMP) farmer directors are in discussions to define the process of clarifying the roadmap for what is required for AFMP members to become owners of Arla.

Three groups of dairy farmers supply milk to Arla Foods: owners of Arla Milk Link, direct suppliers and members of Arla Foods Milk Partnership (AFMP). AFMP members, through their investment company, MPL, own part of Arla’s UK business, Arla Foods UK plc, and have long sought to become full owners of Arla Foods amba, on an equal footing with farmers in Arla Milk Link.

Arla Foods amba has always shared AFMP members’ ambition of full membership; most recently made clear in connection with Arla's merger with Milk Link, in October 2012.

The parties are now in the process of laying down the roadmap for what is required before the ambition can be realised.

“Real negotiations can only begin when we have a plan for what is required,” said the Chairman of Arla Foods, Åke Hantoft, who, informed Arla’s Board of Representatives last week that work was about to commence on defining the roadmap.

“The work we’re now embarking on confirms that both parties share the ultimate objective that, in the future, we will be able to offer full ownership to the AFMP members who want it and who can comply with the terms of the offer,” said Åke Hantoft.

Work begins this month within the framework of Arla and MPL, AFMP members’ investment business, which has a joint venture company that currently owns a 6.3 per cent stake in Arla UK. Besides the AFMP farmer board directors, the Arla Foods amba board of directors, and Arla's management, will be involved in defining the terms.

"Over the past 19 years, Arla Foods Milk Partnership, has enjoyed a close relationship with Arla. Almost a decade ago, in 2004, we made our first investment in Arla UK, through our investment arm, MPL, and in January 2012, began increasing our investment. We welcome this major new development,” said Jonathan Ovens, Chairman of AFMP.

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Facts about AFMP

The 1,300 members of Arla Foods Milk Partnership (AFMP) own 3.15 per cent of Arla Foods UK via their investment vehicle, Milk Partnership Limited (MPL), in a joint venture with Arla Foods amba. Since January 2012 AFMP increased its  investment to 0.5 pence per litre per annum.

Arla Foods UK plc is home to some of the UK’s leading dairy brands including Cravendale, Lurpak, Tickler and Anchor. Processing approximately 3.2 billion litres of milk a year and with a turnover of approximatey £2bn Arla is the UK’s largest dairy company.

Over 4,000 daily deliveries are made to stores and regional distribution centres nationwide, Arla's brands can be found across the dairy category and the company has a 26 per cent share of the GB milk pool. Behind this leading business is a team of circa 4,000 people across the UK located at our dairies, distribution centres and head office.