Arla clear caps 1

Source: Arla 

The tie-up was described by the pair as ’the UK’s largest private label dairy contract’

Arla and Asda have extended their long-standing own label strategic partnership for a further four years.

The dairy co-op will continue to supply own-label milk, cream, cheese, and butter to Asda until 2027, in a deal that will give Arla farmers “stability and security”, it said. And it means Arla has now had an own label supply relationship with Asda for more than 20 years.

During the four-year period of the contract, Arla’s farmer owners will supply over three billion litres of milk across the Asda product range. Arla described the tie-up as “the UK’s largest private label dairy contract”.

The announcement of the deal comes three months after Sainsbury’s dropped Arla and made Müller its sole own-label milk supplier in April.

Arla and Asda have had “a long partnership of working together to deliver healthy and nutritious dairy products to UK consumers”, said Jonathan Dixon, senior VP of sales at Arla Foods UK.

“While this new, four-year agreement is a continuation of that promise, it also demonstrates the commitment from Asda to support our farmer owners on their sustainability journey.”

Arthur Fearnall, who is on the UK board of directors at Arla Foods, said: “We thank Asda for their commitment and look forward to working together on key initiatives, such as sustainability and animal welfare.”

Paul Gillow, VP for fresh foods at Asda, also hailed the benefits of the partnership in a period of “ongoing instability” in agriculture.

“Sustainability plays a key role within our strategy with a target to reach net carbon net zero by 2040 so we are excited to work together with Arla farmer owners to reduce carbon impact and raise farm welfare standards,” he said.