FrieslandCampina to transfer part of German dairy business to Muller

GERMANY – FrieslandCampina, a Dutch multinational dairy cooperative, has announced plans to divest parts of its German consumer business to privately owned German dairy company, Müller, in order to focus on its best-performing international cheese and milk businesses.

Under the deal, which is awaiting approval from the competition authorities in Germany and the co-op’s member farmers, Müller will purchase the Landliebe, Tuffi, Südmilch, Puddis, and Mondelice brands.

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Private-label products in FrieslandCampina’s “white dairy range”, and its foodservice brand Gastro are also included in the deal.

It also encompasses FrieslandCampina’s German production facilities, warehouses, and distribution centers in Heilbronn, Cologne, and Schefflenz.

However, FrieslandCampina is not exiting Germany altogether and will continue the sale and marketing of international brands such as the Valess, Frico, and Holland Master cheese lines, and Chocomel drinks.

Additionally, FrieslandCampina will maintain its presence with creamers and savory ingredients brand Kievit in Lippstadt, as well as with nutraceutical company DFE Pharma in Goch and Nörten-Hardenberg.

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The shift, according to the Dutch dairy, is to enable it to focus on the marketing and sales of its international brands Valess, Chocomel, its cheese brands Frico and Holland Master, and private labels produced by FrieslandCampina outside Germany, including cheese and cream spray cans.

 

"Market conditions, especially inflation, played a role in the decision. When Müller’s offer came, we thought this might be a good opportunity for these brands to grow and for us to focus on our international brands, more than we did in the past."

Jan-Willem ter Avest, director of corporate media relations at FrieslandCampina Tweet

The dairy cooperative noted that after the approval of the transaction, it will continue to collect and process the milk from its German member dairy farmers.

For the German member dairy farmers, all rights and obligations associated with membership of the cooperative remain unchanged, the company assured.

The Dutch cooperative added that the farmers will also continue to be entitled to the FrieslandCampina guaranteed price, the supplementary cash payment, allocation of profit to the general reserves, and, if applicable, any supplementary payments.

German multinational dairy company Müller, will, on the other hand, take over the supplier contracts of the German non-member dairy farmers.

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The proposed transaction succeeds the strong revenue and operating profit that FrieslandCampina reported in February, for the year ended 2021.

The dairy giant’s F&B business group performed well over the whole year, with revenues up by 4.3% to €7.9 billion (US$8.9 billion), according to its 2021 annual report.

Meanwhile, FrieslandCampina Engro Pakistan Limited (FCEPL), HBL, and Sindh Enterprise Development Fund (SEDF) have partnered to provide easily accessible, subsidized financing to dairy farmers in Pakistan with a long-term commitment of five years.

FCEPL, the subsidiary of Dutch multinational dairy cooperative, FrieslandCampina, said the partnership will facilitate upscaling operations for sustainable dairy farming and the purchase of exotic animals, benefitting the overall milk supply value chain.

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