UK – Muller, a German-based supplier and distributor of milk has announced the closure of a German factory which it had purchased from Royal FrieslandCampina, to meet the competition regulations.

The closure of the site which was terms as ‘bitter’ is scheduled to happen on October 2023, following a ruling by the German Cartel Authority, Bundeskartellamt.

“The closure [of the Cologne site] is bitter, not only because we are fully behind the takeover despite the conditions, but also because we found a well-positioned and motivated team in Cologne,” CEO Marcus Almeling said.

FrieslandCampina announced in June 2022 that it was divesting part of its German dairy portfolio, with Müller group already in line to snap up the brands.

According to the company’s CEO, Marcus Almeling, the Bundeskartellamt ruled that Müller must find a buyer for the milk-based brand Tuffi and Landliebe, which produces rice pudding and fresh milk-based mixed drinks.

The deal, which came into force in April, included the Landliebe, Tuffi, and Gastro brands, private-label products in Friesland Campinas’s white-dairy range and its foodservice brand Gastro, as well as three production sites in Heilbronn, Cologne, and Schefflenz.

Earlier this year, Müller sold Tuffi to the German dairy group Hochwald which has around 3,000 milk producers and obtained the license to produce and sell rice pudding under the Landliebe brand, expanding the group’s desserts portfolio.

This followed the German competition authority ruling that had given Muller the green light to buy a portion of FrieslandCampina.

In April, this year, Muller introduced a new contract model which it said would reduce volatility and expected to deliver a higher farmgate milk price than the current terms would offer.

Although little detail was available on the contract, which the processor said resulted from having longer-term agreements with fewer and larger customers, it meant much stronger partnerships with customers and better visibility.

The contract highlighted that pricing would still be decided monthly on a discretionary basis and announced with a month’s notice but because of the strength of those partnerships, would move away from the volatility of global milk markets.

Muller said that the revised contract reflected the value of fresh milk and dairy products for its retail customers and that this would form the bedrock of the milk price it offered, applicable to up to 94% of its milk supply.

“We also know issues such as sustainability and herd welfare are of utmost importance to our customers and consumers, and the high standards we expect from our supplying farmers will be maintained as part of this newly revised contract,” it said.

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