Ireland-based dairy group Glanbia has set up a £22.5m joint venture with the UK co-operative Milk Link to serve the UK cheese market.

The venture to be known as Cheese Company Holdings will be 75% owned by Milk Link and 25% by Glanbia.

At the same time Glanbia will sell its Glanbia Foods unit to CCH for £94.3m, with £59.3m in cash up front and the rest in an interest-bearing loan note commencing in 2008.

Barry Nichols, chief executive of Milk Link said: “Moving into cheese production complements our substantial, existing liquid milk and ingredients business, as well as our fresh dairy products business through our strategic alliance with Arla Foods.”

Glanbia group managing director, John Moloney, said the deal would strengthen its strategic focus on high growth business such as consumer products, dairy ingredients and in particular the nutrition market.