The chairman of the German dairy farmers’ association (BDM), Karsten Hansen, claims that German dairy cooperative DMK had no real alternative but to enter a major merger with Arla.

– We don’t view this as a mutual merger between Arla and DMK. Rather, it appears that Arla is effectively acquiring DMK, which needs a new partner due to its weak financial position, Hansen said in an interview with AgriWatch.

He notes that DMK lost around 10 percent of its cooperative members in 2023 because of low milk payouts.

– This is not a situation DMK would have chosen, but they had no other option. While DMK is telling its milk suppliers something different, most see this as Arla stepping in and taking over, Hansen added.

However, DMK CEO Ingo Müller has rejected these claims in an interview with the German agricultural media outlet Topagrar, denying that falling milk volumes or production cuts were behind the decision to merge with Arla.

Arla Foods CEO Peder Tuborgh also refuted the suggestion in a statement to AgriWatch, asserting that the merger was not prompted by a declining supply of raw milk.

– To my knowledge, that’s not what drove the merger. But it is true that many players in Northern Europe are feeling the effects of declining production, especially across the central belt of Europe, Tuborgh said.

While the merger was officially announced in early April, it still requires approval from the representative bodies of both cooperatives as well as the relevant competition authorities.

Read the full story at AgriWatch (subscription required).

Photo: Arla