A new company is being set up to give Arla dairy farmers greater control and influence in the business.

Under the new structure, which starts at the end of May, 11,000 British, Danish and Swedish farmers will become part-owners of Arla Foods UK. The venture will represent 7% of the Arla Foods UK business, with half owned by British farmers through their investment company Milk Partnership and the other by Scandinavian farmers through Arla Foods amba.

The company will examine the performance and strategy of the UK business and address common issues affecting UK, Danish and Swedish producers.

AFMP farmers will invest 1ppl in Milk Partnership, but Arla stressed most farmers had already paid for their original share allocation. The money will fund further investment in Arla UK's processing business.

NFU dairy board chairman Gwyn Jones, said the move demonstrated Arla's commitment to source all its milk from British farms.