The EU today (17 December) cleared the merger between dairy companies Campina and Friesland Foods – provided the Dutch firms sell off a slew of businesses.
After months of scrutiny, the European Commission gave the green light to the deal, which was first struck in April and is set to create one of the world’s largest dairy processors.
The Commission, concerned that the merger would reduce competition in certain dairy sectors in the Netherlands, Belgium and Germany, said the companies had offered to sell a clutch of businesses to get the deal through.
Friesland’s fresh dairy product business, a part of Campina’s cheese business and two Campina long-life dairy brands will be sold.
The two dairy processors also offered to ensure access to raw milk in the Netherlands, the Commission said.
Under these plans, Friesland and Campina said the businesses up for sale would be able to source raw milk from the merged company under a transitional supply deal.
Subsequently, the Commission said, a “Dutch Milk Fund” would be set up to ensure access to a maximum of 1.2bn kg of raw milk a year. The fund, the Commission said, would remain in place “until more structural changes in the market for raw milk were achieved”.
The Commission added that Friesland and Campina had agreed to reduce the “exit barriers” for farmers wishing to leave the merged co-operative, to be renamed FrieslandCampina.
“This third measure would aim at creating a source of Dutch raw milk which was independent from FrieslandCampina and would thus provide a long-term structural solution,” the Commission said.
Competition Commissioner Neelie Kroes added: “We have been able to approve this significant concentration in the Dutch dairy sector because the parties offered substantial remedies, designed to keep these markets competitive and to ensure that consumers will not be harmed by the merger.”