Berglandmilch Wants OM

Delicate Dairy Merger: First Hurdle Cleared

Another merger is on the horizon in the domestic dairy industry.(Bild: APA/APA (dpa))

The next major merger in the dairy industry is on the horizon: “giant” Berglandmilch from Upper Austria wants to acquire the significantly smaller Obersteirische Molkerei, based in Knittelfeld. The first hurdle has been cleared.

It came as a bombshell for the roughly 1,200 farmers who supply milk to Obersteirische Molkerei (OM): In mid-August, they were informed that market leader Berglandmilch, based in Wels, intends to take over the dairy business of the cooperative headquartered in Knittelfeld. And things are moving quickly: As early as Tuesday, OM’s supervisory board and executive board voted unanimously in favor of the takeover.

As Managing Director Michael Riegler confirmed to the “Krone,” information sessions for cooperative members will take place next week in the dairy’s catchment area—from Semmering to Tamsweg. Despite the prospect of slightly higher milk prices, uncertainty prevails among these members—precisely because Berglandmilch, together with NÖM, dominates the Austrian market. Can small, outlying farmers still remain in the game as suppliers? For now, reassurances are being offered: Milk will continue to be picked up.

Concerns About the Kapfenberg Site
According to a report in *Der Standard*, the OM site in Kapfenberg is considered a problem child. Investments of 45 million euros are reportedly needed there. This information was not confirmed by the company on Thursday. 

The 2,400 members of the Obersteirische Molkerei will make the decision at a general meeting on September 15. According to Riegler, every member is eligible to vote, and a two-thirds majority is required. “After that, Berglandmilch must vote on the matter, or general approval from the Federal Competition Authority is required,” Riegler added.

Facts

• Obersteirische Molkerei generated revenue of 374 million euros last year. It has 664 employees and approximately 1,200 milk suppliers, processing about 188 million kilograms of milk annually. A major customer is the Hofer retail chain (“Back to the Roots”).
• Berglandmilch’s annual revenue most recently stood at 1.3 billion euros. It has 8,000 suppliers. In Styria, it currently operates facilities in Voitsberg and Stainz.

Increasing Market Concentration
It is only in the recent past that major mergers have taken place in the domestic dairy market. For example, NÖM acquired Vorarlberg Milch, and Salzburg Milch merged with Pinzgau Milch. The merger currently planned in Upper Styria is expected to affect only OM’s dairy operations, not other areas such as warehouses or a forestry subsidiary.