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Tuesday 11 December 2018

Border dairy amalgamation must not restrain competition in the industry - UFU

LacPatrick was formed from the merger of Town of Monaghan Dairy in the Republic and Ballyrashane Dairy in the North. It processes more than 600 million litres of milk from more than 1,000 farmers, roughly half on each side of the Border
LacPatrick was formed from the merger of Town of Monaghan Dairy in the Republic and Ballyrashane Dairy in the North. It processes more than 600 million litres of milk from more than 1,000 farmers, roughly half on each side of the Border
Ciaran Moran

Ciaran Moran

Ulster Farmers’ Union deputy president, Victor Chestnutt has warned that a possible amagalmation of border milk processors LacPatrick Dairies and Lakeland Dairies must not impact on competition in the industry.

Ulster Farmers’ Union deputy president, Victor Chestnutt said, “When we met LacPatrick earlier this year, they assured us they would look after their producers during this process.

"It is welcome news that they have now entered into exclusive talks with Lakeland Dairies.

"While we would like to see talks concluded in swift manner to help remove any uncertainty, we would strongly urge these two companies to ensure any deal agreed looks after the interests of their primary producers and does not restrain competition in the industry,” he said.

Last week the boards of LacPatrick Dairies and Lakeland Dairies have agreed to enter into exclusive discussions regarding an amalgamation of the two Societies, they said in a joint statement.

Any agreement will remain subject to approval - by members of both cooperative - as well as regulatory clearances.

A deal has been in the works since April, when LacPatrick's board said it was pursing a number of strategic options for the business.

LacPatrick is one of the biggest dairy co-ops in the Border region, as is neighbouring Lakeland.

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Cavan-based Lakeland had emerged early as the most likely merger partner, although Aurivo, Dale Farm and Glanbia had all expressed an interest.

Co-op members will have the ultimate say on whether a deal does go ahead between LacPatrick and Lakeland, and any merger would need backing from 75pc of LacPatrick's members.

LacPatrick was formed from the merger of the old Town of Monaghan Dairy in the Republic and Ballyrashane Diary in Co Tyrone.

It processes more than 600 million litres of milk from more than 1,000 farmers, roughly half on each side of the Border.

A major capacity expansion last year saw LacPatrick opened a €33m plant in Artigarvan, Co Tyrone, but it has struggled to match rivals' milk prices to suppliers.

LacPatrick's sale process has been run by a board subcommittee including chairmen Andrew McConkey and vice-chairman Robert Skelton and Keith Agnew, with EY as adviser.

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