Dutch dairy giants agree on merger plan

Netherlands-based dairy rivals, Friesland Foods and Campina, have yesterday reached an agreement to combine their operations in a bid to maximize returns from their milk supply.

The dairy market is presently facing a number of issues that are affecting market conditions. These include re-regulation markets by the EU and the World Trade Organisation, and a global market for dairy products that can fluctuate wildly.

The merged company is expected to be in a better position to deal with these challenges in the long-term, generating an estimated €175m reduction in outgoings by 2012, despite the initial cost output and operational reorganization required for the merger.