Dutch dairy analyst expects the EU to take its time with the upcoming merger between Arla and DMK.

The merger between Arla and DMK, announced back in April, is likely to require an extended review at the EU level — a so-called “phase 2 investigation” — according to Dutch dairy analyst Tom Booijink from Rabobank. The merger could potentially distort competition.

“If no major concerns are raised, the merger could go through quickly. But given the significant market position of the combined entity — especially in northern Germany, where farming organizations and retailers have voiced concerns — a phase 2 investigation is highly likely,” Booijink told the online media outlet Fødevarewatch.

Mergers between dairy companies are very much characteristic of the sector, but farmers supplying the milk have often worried that consolidation could drive producer prices down, as competing dairies disappear from the market.

If the merger between Germany’s DMK and Denmark’s Arla goes ahead, it would create a cooperative dairy group with an annual turnover of DKK 140 billion.

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Photo: Arla