Nestle and Lactalis have struck notable deals in recent days

Nestle and Lactalis have struck notable deals in recent days

After a week of Chinese whispers, Nestle this morning (11 July) announced that it had struck a deal to buy a majority stake in Hsu Fu Chi, one of China's largest confectioners.

The agreement, which, pending regulatory approval, will see Nestle take a 60% stake in Hsu Fu Chi, follows speculation over the Swiss food giant's interest in the business after confirmation last week that the two sides were in talks over some kind of transaction.

We ran an analysis over why Nestle could be interested in Hsu Fu Chi on our insight pages last week. You can read more here but suffice to say that Hsu Fu Chi's national distribution and knowledge of Chinese consumer habits were likely to have attracted Nestle.

A tie-up with Hsu Fu Chi, as one reader pointed out, will also boost Nestle's product portfolio in China as it looks to take on the likes of Mars Inc, Perfetti van Melle, Lotte and Kraft Foods in the country's fast-growing confectionery sector.

Another major acquisition story emerged on Friday evening, with French dairy group Lactalis securing over 83% of Italian rival Parmalat and bringing to an end one of 2011's most interesting - and at times controversial - takeover stories.

Lactalis president Emmanuel Besnier claimed the company would become "the worldwide leader in dairy products" after winning over the majority of Parmalat's shareholders.

It has not been an easy few months for either company. Lactalis acquired its first stake in Parmalat in March but it was its move, days later, to take its share of the business to 29% that prompted concern in Italy. Politicians and business groups feared Parmalat would end up in overseas control and there was speculation that a national consortium could buy the business.

That speculation prompted Lactalis to make a move for the whole of Parmalat but the Italian firm's board - and some shareholders - argued the EUR3.4bn (US$4.78bn) bid was too low. Nonetheless, Lactalis's position as Parmalat's largest shareholder meant it could nominate candidates to the board and, last month, it secured nine of the 11 seats - which made it all but certain that the company would not have to increase its bid. Most of Parmalat's shareholders, in the end, backed the offer.

Lactalis's first task will likely be to combine its Galbani business in Italy with Parmalat's domestic business. The French company should also benefit from Parmalat's business in Canada and its presence in emerging markets like South Africa and Venezuela. Parmalat, of course, could benefit from Lactalis's footprint across Europe.

And it was in Europe that another of last week's more notable industry stories took place. MEPs in the European Parliament backed new laws on food labelling, a move the politician who led the legislature's talks with member states claimed would benefit consumers and the industry.

German MEP Renate Sommer said the new laws would give consumers more information on topics like nutrition and country-of-origin but also insisted the new rules would mean less bureaucracy for companies.

The European Council of Ministers is expected to ratify the new laws at the start of October. The regulations will then come into force at the end of that month. Food manufacturers then have three years to adapt to the new rules, although they will have an extra two years to meet the regulations on nutritional labelling.

Despite Sommer's claim that the new laws benefit consumers and manufacturers, there was, perhaps unsurprisingly, still concern on both sides. The European Consumers Organisation, the BEUC, again pointed out that food makers will not have to include nutrition labels on the front of pack. And, in the UK, the Food and Drink Federation welcomed the "compromise" reached over the issue but said it remained concerned at the possible extension of country-of-origin labels to products beyond fresh meat.

Still, this whole process started in 2008 when the European Commission put forward its proposals for new EU rules on food labelling. All stakeholders should be commended for devising a package of laws that will at least bring in some improvements for consumers looking to follow a balanced diet.