The UK’s Office of Fair Trading and the Irish Competition Authority have cleared the partnership, which will commence integration from March 12 2014, Adams Foods and First Milk confirmed.
The partnership, announced in November last year, would secure a long-term outlet for the majority of First Milk’s hard cheese, the two firms confirmed in a joint statement.
First Milk would get a fair price for the cheese and this move tallied with its strategic objective of adding value and delivering a sustainable future for its farmers, they said.
The partnership cleared the way for significant additional investment in First Milk’s creameries to ensure that they were among the best in the UK dairy industry.
‘Greater commercial focus’
It would also allow it to “put greater commercial focus on developing brands in areas such as lifestyle nutrition, foodservice (excluding hard cheese) and exports”, the statement confirmed.
According to the terms of the agreement, Adams’s Leek site will cut, pack and market the hard cheeses, including branded cheddars, produced at First Milk’s Lake District and Haverford West creameries.
The contract complemented similar deals with other cheese makers, including Parkham Farms and South Caernarfon Creameries, said Adams, which has a turnover of about £500M and owns brands including Pilgrims Choice cheese.
“Adams Foods’ strategic goal is to be the leading supplier of cheese in the UK through guaranteeing our customers a secure, efficient and traceable supply of high quality British and Irish hard cheese,” said Adams Foods ceo Ian Toal.
“Central to achieving this has been our focus on establishing long term cheese supply partnerships, a £60M investment to date in the UK including our cutting and packing facility in Leek and the development of best-in-class capabilities in relation to product and packaging innovation, marketing and category management.”
The deal would enable First Milk to shorten its supply chain, boosting efficiency, he said.
It would also “provide a strong platform for the further development of Adams Foods’ retail, foodservice and wholesale customer label, convenience format and branded cheese offering", he added, claiming: “At the same time, I believe it will it play a key role in helping to sustain and develop the British cheese market and wider dairy industry.”
First Milk ceo Kate Allum said: “The partnership is a big piece of the jigsaw coming together in defining the strongest core base we have ever had as a business.”