Green light for new milk giant in Salzburg and Upper Austria
Concentration in the domestic food trade continues to increase. The Federal Competition Authority (BWB) approved the merger of SalzburgMilch with the Gmundner Molkerei on Tuesday subject to certain conditions. The dairy farmers get a different purchase guarantee for six years. The bodies of the companies still have to approve the merger. Together, the two cooperatives rise to become the second largest milk processor in the country and overtake NÖM from Lower Austria.
“The commitments enable fair play in the supply chain. Especially with a product as clear as Austrian milk, it is essential to ensure the supply in the long term,” explained the interim head of the BWB, Natalie Harsdorf-Borsch, in a broadcast. According to SalzburgMilch, the merger should be completed by September.
With the green light from the competition authorities, the planned merger has cleared an important hurdle. The companies are still cautious. “It’s not a decision yet. There are still talks and the committees have to agree,” said SalzburgMilch authorized signatory Florian Schwap to the APA. Both dairies are owned by their members as cooperatives, which are thousands of dairy farmers who have the final say.
Specifically, according to the application to the BWB, the Salzburger Alpenmilch Genossenschaft will take over the Gmundner Molkerei Genossenschaft, and the Gmundners will bring the operational business into SalzburgMilch. In other words: number 3 on the domestic milk market “swallows” number 4.
The competition authorities initially had concerns that the loss of competition could lead to worse conditions for the milk-supplying farmers. The two dairies have eliminated this by agreeing to conditions that apply for six years. In this way, the dairy farmers who form the cooperatives have greater delivery rights and a purchase guarantee. At the same time, the farmers are assured that they can market milk directly or sell it directly from the farm.
The milk supply contracts are concluded in such a way that the farmers – both as suppliers and as members of the cooperative – can opt out with notice periods. Fixed-term contracts are also possible. And the farmers are allowed to send their representatives to the supervisory bodies. Another condition: Synergy effects from the merger are to be passed on to the dairy farmers.
SalzburgMilch marketing boss Schwap told the APA that the application had been submitted to the BWB parallel to the negotiations. The negotiations themselves have not yet been completed, and the bodies of the two cooperatives have not yet given their approval. In any case, the aim is to process the merger retrospectively from the beginning of 2022. “Legally, everything must be completed by September.”
The merger would make the new company the second largest milk processor in the country. Number one is Berglandmilch with annual sales of EUR 941 million (each for 2020), followed by NÖM with EUR 346 million. Third and fourth places are currently occupied by SalzburgMilch with EUR 229 million and Gmundner Molkerei with EUR 205 million.