The proposed merger between Austria’s Tirol Milch and Berglandmilch was instigated by the farmer-members of both companies, just-food can reveal.
Tirol Milch, Austria’s number four dairy processor, is planning to join forces with Berglandmilch, the country’s largest dairy, after members of each co-operative held talks on a deal.
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A spokesman for Berglandmilch told just-food farmers wanted to improve the prices they received for raw milk but also wanted to be a part of a “stronger” company amid a changing EU dairy sector.
Europe has seen a number of dairy processors join forces in recent years, from the merger that formed Dutch group FrieslandCampina in 2008 to this month’s proposals in France that could see Sodiaal buy local rival Entremont Alliance.
The Berglandmilch spokesman also pointed to EU plans to scrap dairy quotas in 2015, which will deregulate the sector.
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“They are interested in a company that will survive in economic times that will get rougher,” the spokesman said. “We are facing 2015. Then, the milk market in Europe will be almost without any regulation.”
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By GlobalDataA merger between Berglandmilch and Tirol Milch will create a company that accounts for around 40% of raw milk production in Austria, the spokesman said.
However, the group will enjoy sales of less than 40% of the Austrian dairy market and the spokesman insisted a deal would win anti-trust approval, pointing to the clearance of bigger deals in Europe, including the merger that created FrieslandCampina.
A combined BerglandMilch and Tirol Milch would have annual sales of around EUR700m. Both co-ops will put the proposals before their farmer members over the next two months.
