Fonterra has stormed into the top three of the world’s largest dairy companies.

The New Zealand group overtook Lactalis and FrieslandCampina after racking up sales of $12.1bn (£7.57bn) from its dairy operations in 2010.

Rabobank, which published the latest rankings of the world’s largest dairy groups, said high commodity prices in 2010 had favoured companies with strong exposure to commodity markets over those active mainly in retail markets.

Nestlé and Danone remain the two largest companies in the rankings, their dairy businesses last year clocking up dairy turnover of $28bn and $16.4bn respectively.

Further down the rankings, DMK, the new company created from the merger of Nordmilch and Humana Milchunion, entered the top 20 at 13 with estimated turnover of $5.3bn.

Sodiaal, one place lower, was another newcomer, following the conclusion of its merger with Entremont.

Rabobank said it expected further large M&A deals, particularly in Germany, where consolidation was been limited in the past.

The leading European processors, Lactalis (4), FrieslandCampina (5) and Arla Foods (8) were increasingly going head-to-head to “achieve market dominance”, it added.

“Lactalis remains the most active consolidator in the global dairy market, but its acquisitions in recent months were not sizeable enough to boost its position in the top 20,” the survey noted. “A successful completion of its initiative to acquire Parmalat would obviously change the story and return it to the number two spot.”

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