French co-operatives Agrial and Eurial have announced a merger of their dairy activities.

It will lead to the creation of France's second largest co-operative group in the sector behind Sodiaal, the co-ops said in a joint statement today (18 January).

They added: "Agrial and Eurial share a common vision of the future of France's dairy sector and the changes which lie ahead with the end of dairy quotas in 2015. Together, they will put the accent on added value and growth offered by rapidly developing international markets."

Combined sales from Agrial and Eurial's dairy businesses totals just under EUR2bn.

The merger will account for a combined volume of milk exceeding 2bn litres annually, supplied by 5,200 producers.

Downstream activities will focus on three areas; goat's cheeses, Soignon; ultra-fresh dairy products, with Agrial's 50%-owned subsidiary, Senegral (the other 50% is owned by French dairy group Senoble) being France's leading supplier of retailers own-label products, and cheese ingredients, in particular, mozzarella.

Preparatory work and the implementation of the merger will begin in 2013 and continue into 2014.