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**In its search for a solution to the financial challenges ahead, Danish-based Hirtshals Co-operative Dairy has approached Arla Foods with a view to merging the two companies.

**This means Hirtshals’ co-operative members will be offered membership of Arla Foods following a takeover by Arla Foods.

Hirtshals Co-operative Dairy’s Board of Directors will present their decision to the dairy’s co-operative members at an extraordinary meeting on 18 December.

Hirtshals Co-operative Dairy has also decided to close down production at Ingstrup Dairy and to suspend operations.

The Chairman of Hirtshals Co-operative Dairy, Cyril V Post, welcomes the fact that the dairy’s future has been settled, and accepts that it would have been hard to raise the finance to solve the problems in the current economic crisis. “We stand to lose 30-40% of our milk from the end of 2008 because several co-operative members have given notice of their intention to resign,” said Post.

“The financial crisis is also causing many consumers to opt for cheaper products. As this is an area we don’t cover, our financial situation has been extremely difficult. In this situation, we're pleased that our approach to Arla Foods has been successful and that the dairy will now continue.”

Arla Foods intends to maintain Hirtshals Co-operative Dairy and will, together with the dairy, evaluate its production and dairy products.

“Hirtshals Co-operative Dairy has some interesting products,” says Arla Director of Danish Business Lars Aagaard. “We will now look into the opportunities for regional milk from North Jutlandian farmers. We will also ensure that it is still possible to buy milk from Hirtshals with the lighthouse on the carton.”