Kerry Selling Liquid Milk Biz

January 15/Limerick, Ireland/Irish Examiner -- Kerry Group is set to sell Dawn liquid milk business to Glanbia for 10 million euros  

The sale will have to get the sanction of the Competition Authority, which is expected to ratify it. Kerry said milk suppliers will be remaining within the group in order to protect their long-term interests in the Kerry Group.

Glanbia will continue to use the Dawn Milk and Golden Vale brands in the Limerick area under the terms of the deal and about 160 workers, distributors and agents will transfer to Glanbia once the deal goes through.

From the perspective of both sides, this is a relatively small piece of business, but it is a further step in the consolidation of the dairy sector, which has been a long time coming.

In a recent comment, food analyst Liam Igoe of Goodbody Stockbrokers said given that Kerry is a much smaller player than Glanbia in the milk sector "this deal would make sense for both sides."

Kerry has been scaling down its liquid milk business for some time. It closed its Moate operation five years ago and, in March 2010, sold its Dawn Galway milk business to Arrabawn.

A spokeswoman for Glanbia said the move made sense for it given Glanbia's "long-term interest in the sector."

The group has continued to grow and develop its consumer foods interest in Ireland and has backed its various brands by putting strong advertising behind products to ensure raised public awareness of its expanding consumer range of dairy products, she said.

Although she would not comment on further likely acquisitions, the spokeswoman said that Glanbia was committed to "the ongoing development of its dynamic consumer food business in Ireland and in maintaining a long term interest in the sector."

From the January 24, 2011, Prepared Foods E-dition