Scandinavian dairy giant Arla Foods has flatly denied it is looking to buy Swedish firm Skanemejerier.

Ola Erici, Skanemejerier's MD, claimed Arla was dumping milk prices in Sweden to force through a merger with its smaller rival.

However, a spokesperson for Arla quashed the claim. "We need to correct this because someone in Sweden is talking this up," she told just-food today (14 March).

Arla has said it needs to sign deals with suppliers to meet ever-growing demand for milk.

Arla accounts for 60% of Sweden's milk, compared to Skanemejerier, which produces 10% of supplies, mainly in the south-west of the country.