The two major pieces of consolidation in Europe's dairy sector over the last 12 months have driven the main moves in Rabobank's annual survey of the world's largest 20 companies in the sector.

The creation of DMK from the merger of German dairy co-ops Nordmilch and Humana Milchunion - and Sodiaal's acquisition of fellow French dairy processor Entremont Alliance - meant there were two new entries in the poll.

Rabobank analyst Marc Voorbergen said the deals could have been driven by a need to form "more resilient businesses" amid volatility in the prices of dairy commodities. Voorbergen cited retail pressure as a factor and said consolidation could also create "a more efficient and flexible platform to tackle the upcoming challenge of the termination of the European quota system in 2015".

DMK stood at number 13, with Sodiaal a position further back and Rabobank analyst Marc Voorbergen said there could be further consolidation in France's and Germany's dairy sectors.

"As consolidation steps of this magnitude usually generate strategic reactions from competitors, subsequent M&A events in the French and German dairy markets should not be ruled out," Voorbergen said last week (23 June).

He pointed to the move by Arla Foods - eighth on this year's list - to merge with Germany's Hansa-Milch as an example. "Similar developments can be expected, particularly in the German market where the level of concentration is low," he said.

Voorbergen described Lactalis as the "most active consolidator in the global dairy market" but said its recent acquisitions were not enough to improve its position in the survey, which measures 2010 turnover and takes into account M&A made between 1 January and 15 June 2010.

The analyst said, however, that if Lactalis buys Parmalat - number 15 in the list - it would take the French company from fourth to second spot, above Danone and Fonterra, the New Zealand dairy processor.

Fonterra moved up from fifth to third as higher commodity prices last year benefited the company.

Nestle remained at the top of the list, while FrieslandCampina made up the five largest dairy companies by sales at fifth.

Schreiber Foods, the US company, was the third new processor in the survey, at number 20.