The board of struggling Swedish dairy co-operative Milko has backed plans to merge the company with dairy giant Arla Foods.
The deal, which had already been approved by the Arla board last month, secured “unanimous” support at a Milko extraordinary general meeting yesterday (14 July).
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“There is a strong consensus within Milko for a merger with Arla. It was reflected in the meeting with a quick and unanimous decision,” said Milko chairman Lars Reyier. “Milko can not wait much longer and a merger is the only way to guarantee to all Milko Farmers to continue milk production.”
At the Milko meeting, the company also announced plans to lower the price it pays farmers by SEK0.20.
Reyier said this would be a “serious blow” to Milko’s farmer-members but pointed to the company’s falling sales.
“It is our duty and our responsibility as a board to ensure Milko’s liquidity,” Reynier said.
The Arla board of representatives will meet in October to vote on the merger. Sweden’s competition authority will then look at the deal.
