The UK’s Office of Fair Trading has said that, based on the information currently available to it, it has decided not to refer Dairy Crest’s acquisition of the dairy business of Midlands Cooperative Society to the Competition Commission.
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Dairy Crest announced in May that it had agreed to buy the dairy businesses and assets of the Midlands Cooperative Society for a cash consideration of £20m (US$36.7m), subject to a working capital adjustment.
Midlands Co-op Dairies (MCD) is the largest regional dairy operator in the UK. It processes approximately 200 million litres of milk per year at its dairy in Birmingham and distributes fresh milk, via 16 distribution centres to a range of retail, wholesale and doorstep customers across the Midlands. Milk is sourced from 285 dairy farms located across the region. In the year ended January 2005 MCD had sales of £89m.
Dairy Crest said in May that in anticipated that the Birmingham dairy processing plant would be closed as MCD was consolidated into Dairy Crest’s existing dairy operations. Milk processing will be transferred to Dairy Crest’s existing dairies. In addition it is expected that three of the distribution depots at Oxford, Farringdon and Thame, where there is overlap with Dairy Crest’s existing depot network, will also close.
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