Irish food group Glanbia has confirmed that it is to buy the CMP branded liquid milk, cream and juice business of Dairygold Cooperative for €10.05m (US$13.1m), subject to the approval of the Irish Competition Authority.

The deal includes the relevant sales and distribution assets of CMP but excludes the production and chill facility. Under the new arrangement Dairygold's 130 liquid milk suppliers will continue to supply Dairygold and Dairygold will sell the 6.15m gallon CMP liquid milk pool on to Glanbia.

Glanbia will continue to supply the CMP milk, dairy and juice brands into the Cork area, including continuing CMP door-to-door deliveries.

In addition Glanbia and Dairygold have also confirmed that they have agreed in principle to enter into a contract manufacturing arrangement for elements of their respective milk processing activities. This is subject to the finalisation of contract negotiations, which are ongoing.

"This development regarding the CMP brands and the contract manufacturing agreement with Dairygold are in line with Glanbia's strategy of maximising scale and efficiency in the most appropriate way," said Glanbia group managing director John Moloney.

"The CMP brands will further strengthen Glanbia's consumer foods' customer offering as one of Ireland's leading suppliers of chilled foods and beverages to the retail and food service sectors. Likewise the contract manufacturing agreement is consistent with our strategy of developing further industry alliances and co-operation to achieve mutual efficiencies. Glanbia has a long track record of co-operation with other processors, including Dairygold, and we view this mechanism as a sensible way forward for the industry," Moloney added.