Asda deal secures future of Arla milk supplies

Asda will source over 1.5 billion litres of milk from Arla during the next three years.

The farmer-owned dairy company, which has a processing plant at Stourton on the outskirts of Leeds, said the contract renewal means it will continue to supply Asda’s own brand milk and cream.

The deal also means that the supermarket is now committed to carry Arla’s ‘farmer-owned marque’ on pack, online and in-store until 2019.

The initiative was launched by the processor last year to highlight to shoppers that products displaying the marque were sourced from Arla whose profits go back to its owners.

Asda was the first major grocery retailer to adopt the logo, which is also designed to indicate Arla’s high expectations for animal welfare and environmental standards.

Peter Giørtz-Carlsen, executive vice president of Arla Foods UK, declared himself pleased with the agreement that the two companies had reached.

He said: “This is welcome news and we value Asda’s continued support for our dairy farmers. This demonstrates that we need to develop our industry by partnering with our retail customers and adding value.

“We look forward to working further with Asda and supporting their commitment to our owners.”

In addition to the new contract, Arla confirmed that Asda is extending its DairyLink groups, which are a platform for the supermarket to work directly with Arla suppliers to improve animal welfare, reduce carbon emissions and increase efficiency on farms.

The deal comes amid a major internal restructure at Arla which will see a new global executive management team created.