A proposed chilled yoghurts and desserts joint venture between Nestlé and Lactalis is to challenge the dominance of Danone in European markets.
Nestlé spokesman François-Xavier Perroud said that the new venture, to be set up later this year, would be “aggressive” with new product launches.
The company will be 40%-owned by Nestlé and 60% by Lactalis. Nestlé, the world’s biggest dairy company, will be represented on the board, and will engage in the venture’s NPD at its facility in France.
But family-owned Lactalis, ranked seventh in the world, will have overall control of the operation. Perroud said the French company brought a quality of expertise and assets to the venture that meant it warranted a controlling share.
“Lactalis has excellent control of the supply chain. The people in that business know how to make chilled dairy products at a highly competitive cost price. They are also good at milk collection. We’ve made no secret of the fact that we’ve not been happy with our chilled dairy business. We believe the new company will have the assets to become a stronger competitor to Danone.”
Nestlé, whose yoghurt and dessert brands in the UK include Ski, Sveltesse and Munch Bunch, generates about E1bn a year in the European chilled yoghurts and desserts sector, said Perroud.
Family-owned Lactalis, which was rumoured to be in talks to take over Dairy Crest last month, is best known in the UK for its Président brand and also now owns number two Cheddar brand Seriously Strong.
The new venture is expected to achieve sales in Europe of E1.5bn in its first year, and is not expected to be blocked by the competition authorities.
Richard Clarke