European dairy giant Arla Foods’ proposed acquisition of part of UK dairy firm Yeo Valley is being examined by the country’s competition watchdog.

The Competition and Markets Authority (CMA) launched a merger enquiry today (17 May) and has initiated “phase one” proceedings, whereby concerned parties are invited to comment by a 1 June deadline. A decision is due on 13 July.

Under standard practise, the CMA is probing whether the deal will result in any “substantial lessening of competition within any market or markets”.

In February, Arla announced it was seeking to acquire part of the UK’s Yeo Valley to expand its penetration in the organic milk market. Any deal would give the farmer-owned dairy cooperative the rights to use the Yeo Valley brand in milk, butter, spreads and cheese under an intellectual property licence, an aspect that is also being examined by the CMA.

At the time, Arla said the Yeo Valley yogurt, ice cream, cream and desserts business would continue to be run independently through Yeo Valley Group.