Japanese confectioner Morinaga and the country's second-largest dairy group Morinaga Milk have confirmed that they are in talks, with speculation centring on the possibility of a merger between the two.

While both companies have denied that the talks are being staged with a view to merging, analysts have continued to focus on this as the likely outcome.

One industry insider told just-food that the companies are expected to merge next autumn.

The source indicated that the merger of food makers Meiji Seika Kaisha and Meiji Dairies Corp. earlier this year has prompted the move.

Confectionery maker Meiji Seika and Meiji Dairies announced their plans in September, similarly denying the merger until a deal had been nailed down.