German dairy group Unternehmensgruppe Theo Müller is to shut two domestic sites it bought from Dutch peer FrieslandCampina a year ago.

Müller said the facilities at Heilbronn and Schefflenz in the Baden-Württemberg region are “not viable due to negative economic prospects” and will be closed before the end of summer 2026.

Around 400 employees will be impacted by the closures.

The original deal for Müller to buy a portion of FrieslandCampina’s German assets, including facilities and most of its products aimed at the German market, was announced in 2022. However, due to competition concerns, it was not until February last year that the green light was given to the transaction and then on the proviso Müller would find a buyer for milk-based brands Tuffi and Landliebe.

At the time, Müller was unhappy it also had to close a factory in Cologne it purchased from FrieslandCampina to meet competition regulations.

In March last year, German dairy co-operative Hochwald announced it was to purchase the Tuffi brand from Müller.

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The two plants Müller has now announced it will close were part of the package when the deal finally came into force on 1 March last year.

In a statement sent to Just Food today (4 March), the company said the production and distribution of the products supplied by the sites will continue beyond 2026.

It said: “The cost structures at the Heilbronn and Schefflenz sites are too high and not competitive. In addition, there is an enormous need for investment at the Heilbronn site, which further exacerbates the situation.”

It added: “In the highly competitive dairy products market, which includes the yogurts and desserts produced at the Heilbronn site, significant volume growth and the resulting cost efficiencies are not expected in the medium to long term.”

Cornelia Heiser, managing director responsible for the Landliebe business, said: “A comprehensive economic analysis has shown that, under these conditions, the two production sites have no prospect of returning from the deep red to a profitable business in the long term. We will integrate the product portfolio into other German locations of the group.

“We are aware that this decision will cause uncertainty among employees and will start talks with the works council as soon as possible with the aim of finding socially acceptable solutions.”