Arla has secured a major own-label Cheddar contract with Asda, as it continues to ramp up its presence in UK cheese following its merger with milk Link.

The contract will start in April 2014, when Arla will take over own-label cheese production for Asda from First Milk.

“Our merger with Milk Link last year presented us with many growth opportunities in terms of both building further strategic relationships with customers and developing our product ranges,” said a spokeswoman for Arla. “This new business opportunity is a good example of the progress that we are making.”

The loss of the Asda contract has prompted First Milk to launch a consultation to shut down its plant in Maelor, where it currently packs Cheddar for Asda. Asda cheese accounted for 60% of the volumes handled at Maelor, and the site would no longer be viable, First Milk said.

The company also called Arla to take on the 231 staff at Maelor who now face redundancy. Arla declined to comment on the suggestion.