Arla Foods to sell Sonthofen cheese factory in Germany to Allgauer Hof-Milch

Dairy industry news : Danish dairy company Arla Foods will sell its cheese production factory in Sonthofen, Germany to Allgauer Hof-Milch, a German dairy producer for an undisclosed price.

Arla Foods revealed that the two companies have inked a letter of intent and will look to wrap up the transaction by the end of next month.

The Danish dairy company revealed that it is disposing the cheese factory in Sonthofen as the specialty cheese produced and distributed from there is no longer in line with its strategic orientation in Germany and Europe.

The Sonthofen cheese factory has a production capacity of 5,100 tons of cheese per annum. It produces an assortment of cheese that includes Alp cheese, wheat beer cheese and red wine cheese among various specialty cheeses.

Arla Foods’ Sonthofen cheese factory in Germany. Photo courtesy of Arla Foods amba 2018.

Peter Giortz-Carlsen – Arla Foods’ Head of Europe, executive vice president, commenting on the sale of the German cheese production factory, said: “All of our production sites in Germany are focused on supplying both the German market and our export markets, playing a crucial role in our delivery of the Arla Group strategy, Good Growth 2020.

“However, since the site in Sonthofen no longer corresponds with our overall strategic aim, we are pleased to have found a suitable buyer to continue its production and legacy.”

Through the sale of the Sonthofen cheese factory, Arla Foods says that it has ensured that cheese production will continue at the site in the future. Currently, 84 people are employed by the German cheese production factory.

The Danish dairy company revealed that 61 employees from production and the related dairy shops will be retained and work under Allgauer Hof-Milch. On the other hand, the remaining 23 employees, who are in the administrative wing of the Sonthofen cheese factory, will be helped with other alternatives. The options include continued employment with the German dairy company or redeployment within Arla Foods’ network in Germany.

Arla Foods says that it will continue to supply milk for the Sonthofen cheese factory even after the sale to honor the milk supply contracts with Allgau region farmers for a certain period of time.

Additionally, Allgauer Hof-Milch is expected to produce cheese products to Arla Foods until further notice, so that the Danish dairy company can comply with the existing contracts with its retail customers.

Arla Foods’ other dairy processing plant in Bad Wörishofen in the Allgau region is not part of the transaction with Allgauer Hof-Milch. However, the Danish dairy producer has been mulling various options for the dairy processing factory since last November as per the latest dairy industry news.