The Milk Group and Zenith Milk co-ops are going ahead with a merger which will create a "next generation co-operative".
The new organisation, Dairy Farmers of Britain, will start trading on July 1 and handle 20% of the UK's milk, supplying all the country's biggest dairies. It believes greater efficiencies in haulage and administration should bring £6m cost savings in its first year. Milk price and contract harmonisation will be complete by April 2003.
Former Milk Group chairman David Stern will chair Dairy Farmers. He said: "We are confident that Dairy Farmers of Britain marks a significant turning point in the UK dairy industry."

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