Sale of Somerset dairy nearing completion
Milk Link is negotiating the sale of its Staplemead creamery to French food and dairy products company Andros, as the farmer co-operative exits the fresh dairy ingredients sector.
The sale of the creamery in Frome in Somerset is subject to final due diligence and both parties expect completion by the end of September.
As part of the proposed agreement, Staplemead Dairy Products, Milk Link’s joint venture with Arla Foods UK, based at Staplemead - which produces a range of creams, custards and flavoured milk - will also end. This will be replaced by a co-packing agreement between Arla and Andros, which will continue until the joint venture ends in early autumn.
The sale follows Milk Link’s recent agreement to increase its stake in the Westbury Dairies’ skimmed milk powder (SMP) and butter processing facility and will secure increased efficiencies and cost savings for the co-operative. Milk Link will continue to supply ingredients to the food processing sector and its range will include SMP, butter, bulk milk, cream and cheese and, through its relationship with Glanbia, whey products.
The Andros dairy division manufactures 500,000t of products at seven factories in France, two in Italy and one in Turkey, including yoghurts, fromage frais, milk based drinks, smoothies, and dairy desserts, and currently supplies the UK retailers with own-label products. It has an operation in St Ives in Cambridgeshire, but the acquisition of Staplemead will allow it to develop its first UK production facility.
Arla Foods chief executive Peter Lauritzen said: “We understand Milk Link’s decision to sell Staplemead and look forward to a positive working relationship with Andros, which already supplies key UK retailers and has expertise in the production of fresh dairy products. We understand it has major investment plans for the site.”
The co-packing agreement at Staplemead complements Arla Foods’ Northallerton and Oakthorpe operations which produce fresh and speciality creams for the UK’s major retailers.
