Arla's Merger with DMK Raises Concerns Over Russian Operations
The merger between Arla, a farmer-owned dairy company, and the German dairy group DMK Group has been officially sanctioned by EU competition authorities. This strategic union, which was finalized on June 1, 2026, aims to bolster Arla's economic resilience and ensure sustainable food production, according to Arla Sweden's CEO Cecilia Kocken.
Despite Arla's previous withdrawal from Russia following the country's invasion of Ukraine, the merger introduces a new dimension to its operations due to DMK's existing facilities in Russia. DMK continues to operate a fully functional cheese plant in the Voronezh region, raising questions about Arla's future strategy concerning these operations.
Cecilia Kocken stated that Arla's position on Russian operations remains unchanged but emphasized the need for careful consideration regarding local employees. Decisions about the Russian facilities will be made in conjunction with DMK, as they now function as a single entity.
Impact of the Merger
The merger brings together 11,200 dairy farmers and 28,800 employees across seven European countries, with the joint headquarters located in Viby, Denmark. The combined entity is projected to have a turnover exceeding SEK 215 billion and manage a milk volume of 19.4 billion kilograms annually.
In response to inquiries about future plans for the Russian market, Vera Hassenpflug, DMK Group's press contact, reiterated that decisions will be made collaboratively with Arla. However, specific strategies remain undisclosed at this time.
Facilities in Russia
DMK's operations in Russia involve two dairy plants in the southwest, dedicated to cheese production and employing hundreds of local workers. The continuation of these operations under the new Arla-DMK entity remains a focal point of scrutiny amid geopolitical concerns.
Arla's commitment to setting milk prices for its member farmers contrasts with the consumer pricing set by grocery stores, highlighting the cooperative's influence within the dairy market.
