Freshways-Medina Dairy merger gets go ahead

The merger of milk processors Nijjar Group Holdings Ltd (Freshways) and Medina Holdings Ltd has been cleared by the Competition and Markets Authority (CMA).

The joint operation will process more than 450 million litres of milk a year through sites at Acton and Huddersfield. A third site will be created in Southampton with the reopening of the Watson’s dairy site.

The potential merger of the two major milk processors has been ongoing since May 2019.

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According to the CMA, the investigation found that Medina has been in financial difficulty since at least 2018.

Evidence put forward by the firms suggested that without a merger in place, it was likely Medina would have had to exit the industry. Freshways agreed to provide a loan to Medina worth £8m in January 2021.

Medina Dairy made a pre-tax profit of £1.35m in the year to 31 October 2020, after making a £10m loss the previous year.

The CMA said it does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the UK.

Freshways has recently announced a liquid standard price of 40p/litre for May, while Medina is currently paying 37.8p/litre for April.

Bali Nijjar, managing director of Freshways, said he was delighted that the merger of Freshways and Medina will go ahead.

“What started as a conversation between ourselves and Sheazad Hussain, managing director of Medina, in February 2019, and which we announced in July 2021, has finally been concluded. It has been a complex process with numerous challenges in our way, not least with Covid-19,” said Mr Nijjar.

 “This basically put a hold on matters for months as both businesses struggled to handle its effects. Freshways, which is food-service orientated, saw an overnight fall in weekly volumes of 2.5 million litres and 30%, as most of the coffee shops and hospitality businesses that we serve simply stopped operating.”

Mr Nijjar looks forward to integrating the two businesses fully and moving forward with farmers and customers.