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The joint venture will further strengthen the relationship between Arla Foods amba farmers and AFMP farmers (MPL members), and will give UK farmers more insight into their processor’s business.

Under the joint venture, a new company will be established, which will hold a 7% share in Arla Foods UK plc. Arla Foods amba and MPL will each take a 50-50 stake, with money invested by MPL helping fund further investment in Arla UK’s processing business.

Commenting on the joint venture, Arla Foods UK plc’s CEO, Peter Lauritzen, said: “Arla Foods amba is a farmer cooperative and is committed to strengthening its relationship with UK farmers. The joint venture underlines Arla Foods amba’s commitment to come together with UK farmers so they have an opportunity to input into Arla UK’s strategy and share in the success of the UK business.”

Common interests

The joint venture company board will have equal representation from both MPL and Arla Foods amba. The purpose of the board meetings will be to discuss the performance and strategy of the UK business and discuss matters of common interest between UK, Danish and Swedish producers.

Under the joint venture agreement, the level of investment in MPL for AFMP farmers (MPL members) will be one penny per litre. Due to MPL’s previous investment in Arla Foods UK plc, the majority of farmers have already paid in full for their original share allocation. Any overpayment will be returned to members. New members joining the Partnership will pay a 0.2ppl levy, through MPL, over a five-year period, to bring their total investment to one penny per litre.

Jonathan Ovens, chairman of MPL and AFMP, has welcomed the move. “The joint venture has given us the opportunity to join a family of farmer shareholders and to get closer to, and gain a greater understanding of, Arla’s UK business. We are buying into a good, strong business and are excited about the company’s long-term strategic direction.

Ove Møberg, chairman of Arla Foods amba, is also delighted: “This initiative unites almost 11,000 Danish, Swedish and British dairy farmers in a joint venture and allows UK farmers to be part owners of Arla Foods UK plc.

“We've had a good, positive dialogue with MPL over the last 10 months and welcome the opportunity to work more closely with them in the future.”