European dairy co-operative Arla Foods announced plans to sell its cheese production site in Sonthofen, Germany, to Germany-based dairy company Allgäuer Hof-Milch GmbH. Arla Foods decided to take this step because the production and distribution of the specialty cheese produced in Sonthofen no longer corresponds with the strategic orientation of Arla’s businesses in Germany and Europe.

"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," says Peter Giørtz-Carlsen, head of Europe and executive vice president.

There are currently 84 people employed in total at the site. The 61 employees from production and the associated dairy shops will continue to be employed by Allgäuer Hof-Milch as part of the transfer.

It is planned that the milk for the production will initially continue to be supplied by Arla Foods, whose milk supply contracts with farmers from the Allgäu region are still valid until the end of 2019. In addition, it is planned that Allgäuer Hof-Milch will continue to produce cheese products for Arla until further notice, so that Arla can comply with the current contracts with its retail customers.

The second Arla site in the Allgäu region in Bad Wörishofen, Germany, is not affected by this planned transaction. Arla is currently examining various strategic options for this site, as the company already announced in November 2017.