Organic milk from Denmark will be delivered to Lidl in Germany
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Dairy group Arla Foods has signed an organic dairy supply deal with discount retailer Lidl, according to the dairyreporter.com.
The big dairy company Arla will use some of its 347million kg of organic milk it handles in Denmark to supply private label organic milk and butter to Lidl's 3,500 domestic stores in Germany. The deal, worth several million Danish Kroner and a piece of good news for Arla after boycotts and a court fine in recent weeks, means the firm will not only supply Lidl in Germany, but also in Denmark, Sweden and Finland.
It is the first time Arla has been contracted to supply organic dairy products to the German market; something that may help the group offset money lost in Denmark due to an influx of cheap, German milk. The deal is also another step in the development Europe's organic dairy sector. A recent report by Organic Monitor highlighted how multinational food firms were increasingly buying into organic food sectors as consumer demand grew.
It said the likes of Heinz, Danone and PepsiCo had all moved in, while America's biggest dairy company, Dean Foods, had just bought up the country's biggest organic food company, Horizon Organic.
Arla has followed suit, setting up organic milk partnerships will smaller dairies in Denmark.
Its deal with Lidl in Germany will now establish the group on Europe's fastest growing organic food market.
In last July Lidl had an organic week with around 50 different items in their 2500 discounters in Germany, in order to test the interest of their clients in organic products. As it was apparently quite successful, they started in the second week of January 2006 to build up an organic range. If the proclaimed aim of introducing 20 % of the foodlines as organic is realistic, is questioned by insiders of the organic industry. At the moment Lidl is carrying 11 different fruit and vegetables (e.g. apples, kiwis, oranges, brokkoli, potatoes) as well as eggs in organic quality. The assortment is around 1000 foodlines altogether.