Proposed acquisition of Them Andelsmejeri by Arla is abandoned

Christian Schultz, Chairman of the Competition Council, said:

Our investigations indicate that a merger between Arla and Them Andelsmejeri would harm competition with the risk of higher prices on firm and hard cheese, which account for about half of the cheese consumption in Denmark. Cheese is the most valuable category of dairy products, and Danes' expenses on cheese make up approximately five percent of total food expenses.

We have found that there are several markets affected by the merger, and in many of them we had competitive concerns. This is especially true regarding Danbo cheeses and similar cheeses, which are widely used for breakfast and cold cuts. The parties have not presented solutions that could remove these concerns. The parties have chosen to abandon the merger, so we are discontinuing our work on the case without issuing a decision.

Arla Foods amba (Arla) has withdrawn its notification to the competition authorities regarding acquiring sole control of Them Andelsmejeri A.m.b.a. Therefore, the DCCA has discontinued its work on the case a few weeks before the DCCA's deadline for issuing a decision.

The merger has been discussed several times in the Danish Competition Council, and the DCCA has expressed concerns to the parties about whether the merger could harm competition. If a merger significantly impedes effective competition in a market, it must be prohibited according to the Danish Competition Act.

The DCCA has carried out extensive market investigations, where customers and competitors have been consulted. A number of economic analyses have also been carried out.

Among other things, the investigations show that the merger affects a wide range of distinct markets within the dairy sector in Denmark. Overall, these markets include the sale of firm cheese, hard cheese, and grated cheese, as well as organic cream in bulk, conventional and organic raw milk, and input whey.

In several of these markets, the DCCA has had competitive concerns regarding the merger. These are markets where Arla already holds a very strong position, which would be further strengthened by the merger, and where Them has been one of the few close competitors.

This particularly applies to the sales of the Danish Danbo cheese and Danbo-like cheeses. These cheeses make up the vast majority of firm cheese sales in Denmark and include mild and more aged varieties, such as Them's "Fætter Kras" and "Them Guld," as well as Arla's "Riberhus" and "Klovborg." The Danish Veterinary and Food Administration refers to Danbo cheese as Denmark's national cheese.

Arla also holds a very prominent position when it comes to access to raw milk in Denmark, which is the main ingredient in cheese production.

Arla is an international cooperative dairy with headquarters in Denmark and production facilities both in Denmark and abroad. Its main activities are the production and sale of dairy products, including fresh milk, yogurt, cream, and cheeses, among them Danbo cheeses and Danbo-like cheeses.

Them Andelsmejeri’s main activity is the production and sale of firm and hard cheeses in Denmark. Them also sells Danbo cheeses and Danbo-like cheeses. 

For further details

Contact Hanne Arentoft, Head of Communication at the Danish Competition and Consumer Authority, phone 41 71 50 98.