Watchdog examining merger of Irish milk cooperatives
The competition watchdog has launched an investigation into a merger between two Irish dairy co-operatives that collect milk from around 1,350 farmers in Northern Ireland.
The merger of LacPatrick, in Monaghan, and Lakeland Dairies, which is based in Cavan, was backed by well over 90% of the co-ops' members in meetings held last year.
However, the Competition and Markets Authority (CMA) has now announced it is investigating the proposed deal.
The CMA explained that it would consider whether the merger could be expected to result "in a substantial lessening of competition within any market or markets in the UK for goods or services".
The organisation is calling for any parties with concerns over competition or public interest matters arising from the proposal to contact the watchdog.
The merger would create the second-largest dairy processor on the island, with a milk pool of 1.8bn litres.
Alo Duffy, the chairman of Lakeland, said the merged companies would pay a "sustainable and competitive milk price in line with market conditions".
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At meetings in October, 97.24% of Lakeland members voted in favour, while 95.99% of LacPatrick farmers gave the thumbs-up.
The newly merged entity would be known as Lakeland Dairies, with 3,200 suppliers creating a milk pool second in size to Glanbia, which has approximately 2.5 billion litres.
LacPatrick has around 600 Northern Ireland suppliers, and Lakeland some 750.
The merger is the latest shake-up for LacPatrick suppliers.
In 2015, Town of Monaghan Co-op took over Ballyrashane Creamery in Co Antrim, leading to a rebrand as LacPatrick.
In 2017, LacPatrick unveiled a £30m "Brexit-proofing" technology centre for milk powders in Strabane, Co Tyrone.
Lakeland also owns the Pritchitts processing centre in Newtownards.