Dairy TNC’s are building resilience to the next crisis through acquisitions, closures, expanding market share and diversifying their sources of milk supply at the expense of smaller national and local cooperatives.
On July 3 Lactalis announced it had purchased the U.S. organic dairy business Stonyfield for $875 million from rival French company Danone which was required by regulators to sell Stonyfield following its purchase of WhiteWave Foods for $12.5 billion. Both purchases are motivated by the growing market for more health conscious foods in North America.
The privately owned Lactalis has been on a path of rapid growth since it purchased Parmalat in 2011 and then carved out a stake in the Indian market through the purchase of Tirumala in 2014. It bought the German dairy Omira for an undisclosed sum in May this year.
Friesland Campina, already with a strong presence in South East Asia, took a controlling stake in Pakistan based Engro Foods early in 2017.
Arla Foods has West Africa in its sights and has expanded operations through joint ventures in Nigeria, Senegal and Cote d’Ivoire. Meanwhile Arla announced on July 3 that it will close its Lillebaet Dairy in Denmark in 2019, affecting 66 jobs.
The German dairy company DMK is responding to the disastrous low milk prices of recent years with three plant closures at the cost of 270 jobs.
Dairy TNC’s are strengthening their dominance through every climatic and financial crisis as milk price volatility and job instability becomes a permanent feature in a system rigged in favour of global commodity traders, major food processors and big retailers.