The aim of this brochure is to thoroughly inform all farmer owners of Arla Foods and DMK Group with DOC Kaas about the relevant topics concerning the proposed merger.
This brochure provides details on the conditions and objectives of the merger and the benefits and opportunities Arla Foods and DMK Group aim to accomplish together. You will also find information on the process from approval of the merger, through a transition period towards becoming the strongest dairy cooperative in Europe.
The
from both companies.
Ingo Müller CEO, DMK Group
Peder Tuborgh CEO, Arla Foods
DEAR FARMERS,
We are proud to share information with you about the planned merger between Arla Foods and DMK Group. Together we are creating the strongest European dairy cooperative, uniting over 12,000 farmer owners, and forming a strong cooperative with a combined revenue exceeding EUR 19 billion. With this merger we aim to increase the value of our farmer owners' milk, ensuring a competitive milk price. By ensuring high-quality dairy production and innovation, securing our future in Europe and globally, and further strengthening the financial abilities to invest, we will create the future of dairy.
The merger is more than a business decision; it’s a union of shared values and strengths. Both Arla Foods and DMK Group have a rich history of uniting farmers, and together, we will shape the future of dairy for generations.
DMK Group and Arla Foods are an ideal fit. We share the same core values, and we complement each other’s market positions and product portfolios. Together, we can ensure food security and bring even more nutritious products to the world. As Europe’s strongest dairy cooperative, we aim to forge stronger partnerships with customers and offer an attractive environment for farmers.
We are excited to start the journey ahead as we explore the details and implications of the merger in this brochure, and in the coming months, we will engage in discussions on the proposed merger. We look forward to having an engaging dialogue with you as we move forward together.
Heinz Korte
Chairman of the Supervisory Board of DMK eG
Thomas Stürtz Chairman of the Board of DMK eG
Guus Mensink Chairman of the Board DOC Kaas U.A.
Jan Toft Nørgaard
Chair of the Board of Directors, Arla Foods
Best regards
Inger-Lise Sjöström
Vice-Chair, Board of Directors, Arla Foods
From left to right:
Peder Tuborgh, CEO Arla Foods, Inger-Lise Sjöström, Vice-Chair, Board of Directors, Arla Foods, Jan Toft Nørgaard, Chair of the Board of Directors, Arla Foods, Guus Mensink, Chairman of the Board DOC Kaas U.A., Heinz Korte, Chairman of the Supervisory Board DMK eG, Thomas Stürtz, Chairman of the Board DMK eG, Ingo Müller, CEO DMK Group
JOINT FIGURES: ARLA FOODS AND DMK GROUP
to quality and innovation, positioning us to create the future of dairy together. This merger strengthens the resilience of our cooperatives, ensuring robust support for farmers, and expands our reach and offerings, advancing dairy technology and innovation.
DMK Group, the largest dairy cooperative in Germany and Arla Foods, a key player in the global dairy market, complement each other’s market positions and product portfolios, thus future proofing the production of healthy dairy products. The merger is a natural continuation of our strong collaboration, benefiting consumers, farmers, and ensuring a competitive milk price.
With increased resilience through diversified product portfolios and market positions, our combined entity aims to develop stronger partnerships with customers, adding value to their businesses. This environment is not only attractive for farmers but also for colleagues and other business partners, reinforcing our ambition to remain commercially strong despite anticipated challenges in the European milk pool.
EUR BILLION PRO FORMA REVENUE
12,000
FARMER OWNERS (IN 7 COUNTRIES)
19
BILLION KG MILK POOL
TWO COMPANIES – ONE SHARED VISION
ARLA FOODS AND DMK GROUP REPRESENT TWO OF EUROPE’S LEADING DAIRY COMPANIES, UNITED BY A SHARED LEGACY OF FARMER OWNERSHIP AND COOPERATIVE PRINCIPLES.
Our two organisations have much in common. With deep-rooted relationships with farmer owners across Europe, we have consistently prioritised our farmer owners,
ensuring that our efforts contribute to the highest possible milk price and sustainable farming practices. The merger is a natural extension of this collaboration, driven by a unified vision to secure and enhance the important role of dairy in the food system of the future.
As we embark on this exciting new chapter, it’s important to explore the distinct strengths and histories that each company brings to the table.
DMK GROUP: A HERITAGE OF EXCELLENCE
The DMK Group is Germany’s largest dairy cooperative, exemplifying the power of collaboration and tradition. Today, the two cooperatives Deutsches Milchkontor eG (DMK eG) and DOC Kaas U.A. form the foundation of the DMK Group.
The DMK Group’s journey began with the merger in 2011 of two leading dairy companies, Humana and NORDMILCH. This pivotal move established DMK as the largest dairy cooperative in Germany, with a rich history that stretches back over 150 years. In 2016 the Dutch cooperative DOC Kaas joined the DMK Group. Over the years, the cooperative spirit remains deeply ingrained in its identity, providing stability and direction through times of transformation. As a farmer-owned company, DMK Group takes pride in its roots and the regions it represents.
At the heart of DMK Group is a vibrant community of nearly 4,000 DMK farmers, 600 DOC Kaas farmers and 6,800 employees. The cooperative embraces the model of selfmanagement and collaborative efforts to address challenges and innovate for the future of milk production.
The success of DMK Group is evident in its wide array of quality products, ranging from cheese and quark to ingredients and baby food, all crafted to meet the diverse tastes of consumers.
With a stronghold in the hard and sliced cheese category and the ingredients business and a significant presence in food service, DMK Group ensures quality and variety. Trusted brands like MILRAM®, Uniekaas®, Oldenburger®, Humana® and Alete® have earned the confidence of millions, not just in Germany but globally.
DMK GROUP IN BRIEF
5.1
EUR BILLION REVENUE
5.3
BILLION KG MILK VOLUME
4,600
FARMER OWNERS EMPLOYEES
6,800
STRATEGIC SYNERGY
THE MERGER BETWEEN ARLA FOODS AND DMK GROUP IS SET TO STRENGTHEN OUR COMMERCIAL PRESENCE AND OPERATIONS AND INCREASE OUR IMPACT ACROSS SEVERAL KEY AREAS.
Greater Market Reach
The merger expands the cooperative’s global presence, providing access to over 160 markets and enabling us to reach more customers worldwide. This broader reach allows us to deliver nutritious, high-quality dairy products to a larger audience, supported by a complementary product portfolio.
Stronger range of products
By uniting two of Europe’s leading dairy companies, the merger aims to boost our relevance to customers and secure new opportunities for our business, ultimately enhancing the value of our farmer’s milk. Here’s how the merger will achieve these objectives:
ARLA FOODS SITES
By offering a broader range of products with strong market positions within categories such as butter & spreads, milk-based beverages, cream cheese, mozzarella, yellow cheese (Edam, Gouda, Maasdam), and with whey proteins and ingredients, the merger enhances our ability to meet diverse consumer needs. This strengthened range of products and brands allows us to capture more market opportunities and solidify our presence in the dairy sector.
TIMELINE
9 APRIL – 16 JUNE
Farmer engagement
Ahead of the Board of Representatives meetings on 18 June 2025, farmer owners are engaged in the process.
18 JUNE
Merger approval
The relevant cooperative bodies (see below) at Arla Foods and DMK Group will vote on the merger agreement.
Requirements
Arla Foods:
The deciding body is the Board of Representatives. A 3/4 majority is required at the Board of Representatives meeting.
DMK eG:
The deciding body is the Representative Assembly (Vertreterversammlung). A 3/4 majority is required at the Representative Assembly meeting.
DOC Kaas U.A.:
The deciding body is all members. A 2/3 majority is required at the all-member meeting.
19 JUNE ONWARD
Regulatory approval process
If the above-mentioned cooperative bodies approve, Arla Foods and DMK Group will file applications with relevant regulatory authorities.
END 2025
Expected regulatory approval Arla Foods and DMK Group expect to receive clarity on the regulatory approvals by the end of 2025.
START 2026
Transition period begins (day one)
If regulatory approvals are in place, business integration and two-year transition period for the farmer owners begins.
DMK AND DOC KAAS SITES
More Investment and Innovation Power
The merger enhances our investment and innovation capabilities, enabling a step change in performance through new technology and innovation. By pooling resources, we can drive advancements that improve product quality and operational efficiency, and we will continue to invest in future growth opportunities.
Operational Leverage
Through the adoption of best practices from each partner, the merger enhances efficiency and operational strength. This operational leverage results in reduced costs and improved productivity, benefiting the overall business and its farmer owners.
The merger of Arla Foods and DMK Group is a strategic move designed to increase efficiencies, enhance market presence, and secure longterm stability. By leveraging shared resources and expertise, the merged
entity is well-equipped to deliver superior value to farmers, consumers, and customers alike.
Process
Completion of the merger will require approval by the relevant cooperative bodies of Arla Foods and DMK Group and will also be subject to approval by regulatory authorities. Clarity on the regulatory approvals is expected by the end of 2025.
After this approval, the businesses of Arla Foods and DMK Group will be combined step by step. For the farmer owners, a two-year transition period will start where the democratic structure and processes, payment model, and on-farm standards gradually merges towards Arla’s model.
The two-year transition period has the purpose of making sure all farmer owners are given time to adjust to – and prepare for – the new situation.
DEMOCRATIC BODIES TO VOTE ON MERGER
In June, the relevant cooperative bodies at Arla Foods and DMK Group will vote on the merger agreement.
Arla Foods:
The deciding body is the Board of Representatives. A 3/4 majority is required at the Board of Representatives meeting.
DMK eG:
The deciding body is the Representative Assembly (Vertreterversammlung).
A 3/4 majority is required at the Representative Assembly meeting.
DOC Kaas U.A.:
The deciding body is all members. A 2/3 majority is required at the all-member meeting.
“THE INTEGRATION AIMS TO ESTABLISH A UNIFIED DEMOCRATIC FRAMEWORK THAT SECURES REPRESENTATION AND DECISION MAKING AMONG ALL MEMBERS.”
MERGER STEPS
CURRENT STRUCTURE CORPORATE MEMBERSHIP OF ARLA FOODS
EXPECTED TIMING: Q1 2026
NEW EUROPEAN COOPERATIVE DIRECT MEMBERSHIP OF ARLA FOODS1
EXPECTED TIMING: Q2 2026
EXPECTED TIMING: Q3/Q4 2026
GmbH
DMK Group:
DMK GmbH and the two cooperatives; DMK eG and DOC Kaas U.A
DMK GmbH transfers to Arla Foods.
DMK eG and DOC Kaas U.A. become corporate members of Arla Foods
GmbH
GmbH
DMK eG and DOC Kaas U.A. merge into a European cooperative
GmbH
The European cooperative is merged into Arla Foods and the members become direct members of Arla Foods
THE BASICS OF THE MILK PRICE MODEL
SECURING THE HIGHEST POSSIBLE MILK PRICE FOR THE FARMERS IS THE CORE PURPOSE OF A COOPERATIVE.
The way the milk price is calculated and paid out can vary. The merged company will have a milk price model based on the model known from Arla Foods today.
Arla Foods Milk price model
One of the fundamental principles at Arla Foods is that there is one milk price and that all farmer owners are paid for their milk according to a common settlement model. The prepaid price is paid two times a month.
On top of the prepaid milk price, there is a minimum supplementary payment of 1.5 EURc per kilogram of milk based on the full volume of milk delivered
during the year. This follows the retainment policy covering the current strategy period in Arla as approved by the Board of Representatives.
· In 2022 the supplementary payment was 2.2 EURc
· In 2023 the supplementary payment was 2.1 EURc
· In 2024 the supplementary payment was 2.2 EURc
After the two-year transition period all farmer owners will be paid using Arla Foods milk price model.
Note: The supplementary payment to Arla farmer owners is paid out twice a year: A half year supplementary payment in September of 1 EURc/kg for the volume from January to June – and a supplementary payment in March (along with the interest on contributed capital), condition to BoR approval. As a part of the annual profit appropriation, each farmer consolidates a maximum of 1.0 EURc whereof 2/3 are common and 1/3 individual capital. The individual capital is paid out when the farmer leaves Arla Foods.
ARLA MILK PRICE MODEL WITH THE DIFFERENT COMPONENTS
PRE-PAID MILK PRICE
PROTEIN PRICE
- DEDUCTION FOR MILK COLLECTION COSTS
MILK PRICE
BEST QUALITY
+ NON-GMO FEED
+ FARMAHEAD™ CHECK
+ FARMAHEAD™ INCENTIVE
+ MAINTENANCE COST & LOGISTIC SUPPLEMENT
ARLA PERFORMANCE PRICE
+ SUPPLEMENTARY PAYMENT
+ RETAINMENT (INDIVIDUAL AND COLLECTIVE)
2 Plus additions to farmers eligible for special milk deliveries
Milk & quality payments
1Standard milk with 4.2% fat and 3.4% protein
Behavioral payments additions
Consolidation
ARLAGÅRDEN® ENSURES COMPLIANCE WITH MULTIPLE NATIONAL STANDARDS ON QUALITY AND ANIMAL WELFARE:
GERMANY/ LUXEMBURG
QM-Milch
NETHERLANDS
Keten Kwaliteit Melk (KKM)
BELGIUM
Qualité Filière Lait (QFL)
Qualität der Milckette (QMK)
Integrale Kwalite.itszorg Melk (IKM)
ON FARM STANDARDS
UK
Red Tractor
SWEDEN
Branschriktlinjer –Hygienisk mjölkproduktion
Branschriktlinjer för hygienisk intransport av obehandlad mjölk från gård
Branschriktlinjer för kontroll av obehandlad mjölk
DENMARK
Branchekode for egenkontrol i mælkeleverende besætninger
Arlagården®
Currently and from the beginning of the transition period, farmer owners from DMK and DOC Kaas will continue to comply with local quality standards as QM-milch e.V. from Germany, KKM from the Netherlands, and DMK Group’s Milkmaster Programme. Before the end of the transition period, all farmer owners from DMK and DOC Kaas will be audited in the same way as current Arla farmers.
Arla Foods quality program is called Arlagården® and focuses on ensuring high standards in milk quality and animal welfare. It includes the criteria from national standards such as QMMilch e.V. and KKM and compliance levels among farmer owners are almost 100%.
The programme includes a series of guidelines and requirements that Arla’s farmer owners must follow. Farmer owners must ensure animal welfare and that the milk is of high quality, free from contamination, and produced under hygienic conditions. This is to secure that the milk produced lives up to the requirements of local standards, customers and consumers and can be sold across markets.
It is important to emphasise that farmers complying with Arlagården® also comply with the criteria included in the national industry standards shown to the left (including QM-Milch e.V. and KKM).
Throughout the transition period, Arla Foods will help train and support the DMK and DOC Kaas farmer owners to prepare them for meeting the Arlagården® standards.
FARMAHEAD™ TECHNOLOGY: REDUCING CARBON EMISSIONS
The FarmAhead™ Programme aims to reduce farmer owners carbon footprint and to ensure a commercial benefit from the efforts.
The FarmAhead™ Check has been developed with the purpose of providing a toolbox of data-driven and science-based technologies for Arla farmer owners to measure, understand and move ahead in their individual sustainability transition on farm.
The data collected in the FarmAhead™ Check provides a unique overview of all aspects of milk production and is actively used as a management tool to develop the individual farm in a more sustainable direction.
Farmer owners in Arla Foods complete an annual survey followed up by an advisor visit. It is optional whether to participate. Completing the survey adds 1 EURc/kg to the milk price – and over 95% of Arla’s farmer owners completed the survey in 2024.
FarmAhead™ Incentive:
FarmAhead™ Incentive is an optional, point-based system mainly based on the data from the FarmAhead™ Check. Each points adds 0.03 EURc/kg to the milk price. The majority of points are based on data from the FarmAhead™ Check while the rest are based on uploads of separate documentation by the farmer owner.
FarmAhead™ Customer Partnership: Through FarmAhead™ Customer Partnerships, customers can invest in on-farm sustainability efforts and directly contribute to the milk price, which also helps them reduce the emissions from their own value chain.
ARLAGÅRDEN®
A holistic farm management programme Aligned with QM-Milch & KKM
FARMAHEAD™
A data-driven toolbox for facilitating sustainability transitions on farms
FarmAheadTM Check
FarmAheadTM Incentive
FARMAHEAD™ INCENTIVE
Points available from 1st January 2026
BIOGAS/IN-HOUSE ACIDIFICATION
MANURE OUTDOOR WHILE GRAZING
PARTICIPATION IN KNOWLEDGE BUILDING EVENETS BAND SPREADER OTHER
WHAT HAPPENS NEXT?
FARMER ENGAGEMENT
Ahead of the Board of Representatives meetings on 18 June 2025, farmerowners are engaged in the process.
MERGER APPROVAL
The relevant cooperative bodies at Arla Foods and DMK Group will vote on the merger agreement.
REGULATORY APPROVAL PROCESS
If the above-mentioned cooperative bodies approve, Arla Foods and DMK Group will file applications with relevant regulatory authorities.
EXPECTED REGULATORY APPROVAL
Arla Foods and DMK Group expect to receive clarity on the regulatory approvals by the end of 2025. TRANSITION
If regulatory approvals are in place, business integration and two-year transition period for the farmer owners begins.
DEMOCRATIC BODIES TO VOTE ON MERGER
In June, the relevant cooperative bodies at Arla Foods and DMK Group will vote on the merger agreement.
Requirements
Arla Foods:
The deciding body is the Board of Representatives. A 3/4 majority is required at the Board of Representatives meeting.
DMK eG:
The deciding body is the Representative Assembly (Vertreterversammlung). A 3/4 majority is required at the Representative Assembly meeting.
DOC Kaas U.A.:
The deciding body is all members. A 2/3 majority is required at the all-member meeting.
