The controversial merger between Arla and the German dairy giant Deutsches Milchkontor (DMK Group) has recently been approved by the EU competition authorities.
The purpose of the deal was to give Arla better economic resilience and to secure future food production in Sweden, Cecilia Kocken, CEO of Arla Sweden, said when the dairy group announced the merger at the end of May. With the promise that a stronger cooperative would secure both growth and higher milk prices for Swedish farmers, Arla did not, however, touch on a sensitive issue: that of DMK's continued operations in Russia.
Cheese in Russia
Other dairy companies, including Arla, have pulled out of Russia since the country's large-scale invasion of Ukraine just over four years ago. But DMK has chosen to keep its production aimed at the Russian market in the form of a fully operational cheese plant in the Voronezh region. The German dairy giant had previously stated that its operations in Russia would be evaluated once the merger with Arla was approved.
Arla, in turn, has promised to handle DMK's activities in Russia once the merger came into effect, which it did on June 1. However, the dairy group has not yet been able to answer how it intends to address the issue.
Concrete decisions
"Arla's stance on operations in Russia is well known and firm," Cecilia Kocken emphasizes in an email response to TT, but says that she cannot share further details.
"Only now that the merger has been completed can we start making concrete decisions. At the same time, we have a responsibility to handle the situation for the local employees in a correct and respectful manner," she states.
Vera Hassenpflug, press contact at DMK Group, also does not want to comment on future plans for its activity in Russia:
"Arla and DMK are now a single company and will make decisions as such," she writes in an email response to TT.
Facts: Two facilities in Russia
The merger between farmer-owned dairy company Arla and German dairy group DMK Group came into effect on June 1, 2026. At the end of May this year, the EU competition authorities approved the merger.
Arla and Germany's largest dairy cooperative, DMK Group, bring together 11,200 dairy farmers and 28,800 employees in seven European countries. The joint headquarters will be located in Viby, Denmark.
DMK Group operates two dairy plants in southwestern Russia, which are focused on cheese production and employ hundreds of local workers.
The two large cooperatives are merging under the name Arla and are expected to have a turnover of over SEK 215 billion, with a combined milk volume of 19.4 billion kilograms per year.
Arla sets the milk price for its member farmers, but grocery stores and individual chains determine the consumer price.
Source: Arla, TT
