May 27, 2013


Arla Foods and Milk Link reach agreement on sale of Crediton Dairy


Arla Foods UK has entered into an agreement with a management buy-out team led by two former Milk Link executives to sell its milk drinks business, Crediton Dairy.


The sale of Crediton Dairy was a condition required by the European Commission (EC) when giving approval for the merger of Arla and Milk Link in 2012. The remedy related to concerns about a reduction of competition in the UK long-life milk market.
In a statement issued on May 26, Leeds-based Arla Foods UK revealed that it has entered into an agreement with former Milk Link CEO Neil Kennedy and former group finance director Tom Smiddy. Following the merger, Kennedy held the position of senior vice president for milk and member services at Arla until his resignation on 31 March 2013. He will become chairman of the new business, Crediton Dairy Ltd, while Smiddy will assume the role of managing director.


According to Kennedy, Crediton Dairy is "well positioned to play an important role in the fast growing and dynamic milk drinks sector."


"We will aim to be a highly professional and progressive business. One focused on making great tasting, high quality products with demonstrable British provenance and traceability, complemented by customer service excellence, category insight and targeted new product development."


Commenting on the deal, Smiddy said that Crediton would continue to focus on growing its long-life, flavoured and functional milk business.


"At the same time, we will build upon the success of Moo, the UK's leading brand of long-life milk; functional branded milks such as Flora pro activ; flavoured milk brands such as Mars Family Refuel chocolate milk made under a licence from Mars, and our Dairy Pride long life milk and cream foodservice brand," he added.


The deal, which is subject to EC approval and the undertaking of a consultation with Crediton Dairy's 117 employees, could be completed by as early as the end of June 2013.


Crediton Dairy, which has an annual milk processing capacity of around 200 million litres, manufactures a range of products including long-life milk and cream, extended shelf life milk, flavoured dairy drinks, and fresh bulk cream.

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