Danish Crown, Westfleisch joint venture approved

Under EU merger regulations, the European Commission has approved the creation of the new joint venture by Danish Crown of Denmark and Westfleisch of Germany. The joint venture will operate under the name WestCrown. Based in Germany, its main activities will be the deboning of sow carcasses and the subsequent marketing and sale of fresh sow meat.
”I am delighted that approval has finally been obtained,” commented Kjeld Johannesen, President and Group CEO of Danish Crown. ”Now we can focus on starting up production, which will hopefully be operational in early 2016. By investing in our own deboning facilities, we hope to secure better prices for our owners. More specifically, we are removing an intermediary step, which will improve earnings for our owners.”
”We are sure it will be a big win for both companies to join forces in sales and deboning of sows,” added Christian Leding, spokesman for the Westfleisch SCE Executive Board. ”We are ready to relocate our production from Schöppingen to the new premises in Dissen near Münster. We expect it will be a highly valuable step to have a joint organisation regarding sales and marketing and we can hardly wait to get going.”
First announced in March of 2015, the joint venture required approval by Europe’s competition authorities as both partners are active internationally in the food industry, and specialize in the slaughtering, de-boning, processing and refining of meat as well as the sale of fresh meat and meat products. The commission focused its investigation on WestCrown’s potential markets, namely the sourcing of sow carcasses for de-boning and the supply of fresh sow meat for further processing. It found that the re-direction to WestCrown of the sow carcasses currently supplied by Danish Crown to independent German de-boners will affect their sourcing policy and, potentially, their activities. However, it also found there are sufficient companies actively involved in the sector to ensure healthy competition, and so WestCrown would be unable to increase prices or impose detrimental conditions on the downstream market for sow meat for further processing.
Danish Crown slaughters around 325,000 sows in Denmark each year, which have until now been sold as half carcasses to buyers primarily in Germany. Danish Crown is a cooperative owned by 8,300 Danish farmers, and is one of the top 3 meat exporters worldwide.
Westfleisch was originally established in 1928 as a livestock marketing cooperative. It is owned by more than 4,200 farmers in the north-west of Germany and the Netherlands, and is among the top 5 meat suppliers in Europe. Westfleisch has been operating a specialist sow deboning business in Schöppingen near the Dutch border with an annual processing capacity of 355,000 animals.