Dairy co-operatives Arrabawn and Tipperary Co-operative Creamery are in preliminary exclusive discussions over a possible merger of the two operations.
The companies said they were discussing “possible integration” in an exclusive exploratory process, including a potential amalgamation, as they sought to create a stronger organisation in the dairy industry. If it goes ahead ahead, the combined milk pool of Arrabawn and Tipperary would put it in the top four in Ireland.
The co-ops said a merger would be considered only if it enhances returns for suppliers, members, employees and customers, and maintained quality.
Discussions are still at an early phase, and any potential changes would need to be approved by the boards and suppliers in both co-ops. It would also need to be approved by regulators. The companies said they would continue to run their businesses as normal in the meantime.
Nenagh-based Arrabawn employs more than 350 people, collecting milk from more than 1,000 shareholder farmers. It generates turnover in excess of €403 million per year.
The company operates a food ingredients and agri business unit producing B2B and dairy consumer products, including casein, skim milk powder, butter and whey. It also offers a range of animal feeds products.
The co-op last year sold its branded liquid milk, butter and van sales business to Aurivo, the owner of the Connacht Gold and Donegal Creameries brands. That deal was scrutinised by competition authorities before being completed in September.
Tipperary, meanwhile, supplies cheese, milk, milk powder, butter and other dairy products for exporters and home markets.
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