Arla has given the green light for 1,300 UK farmers to become full owner members of its Arla amba pan-European dairy co-operative.
The Arla Foods Board of Representatives in Denmark formally approved the move yesterday, with the 1,300 UK farmers who belong to the Arla Foods Milk Partnership (AFMP) becoming full owners as of 1 January 2014.
At present, AFMP farmers own part of Arla Foods UK through their investment company Milk Partnership Limited (MLP), but have for some time been working towards full ownership of Arla Foods amba, giving them a say in the future strategy of the European dairy co-operative as well as a financial stake in it.
“This demonstrates the strategic importance of the UK for amba and is a reflection of the 20-year relationship that we have had with our processing partner,” said Jonathan Ovens, chairman of AFMP and MPL.
In addition, Arla has also approved its 300 direct milk suppliers to join Arla Foods amba as members. Currently, these are in a standard direct supply relationship with Arla and not part of Arla Foods amba or AFMP.
AFMP farmers and direct suppliers must sign and return their new supply contracts by 15 November to become owners of Arla Foods amba.
Yesterday, the Arla board also approved a proposal for Arla Milk Link members – a third group of suppliers who already hold full ownership of Arla Foods amba – to start receiving an annual payment of Arla amba profits from the spring of 2015, based on 2014 milk supply. This is two years earlier than previously proposed – the original Arla-Milk Link merger agreement provided for payment in spring 2017, based on 2016 milk supply.
On 1 January, MPL and AFMP will become Arla Milk Co-operative (AMCo) which will hold corporate membership of Arla Foods amba.
The Arla Milk Link supply group will remain separate from AMCo post 1 January 2014 but there is a proposal to merge the two in 2016.