Danish dairy firm Arla’s UK branch Arla Foods is set to acquire Yao Valley Dairies, a subsidiary of Bristol, UK-based organic dairy producer Yeo Valley Group.

The deal, announced in an 8 February statement by Arla, included Yeo Valley’s organic butter, spreads, milk and cheese brands, giving Arla the rights to use the Yeo Valley name on these products.

The Yeo Valley yoghurt, ice cream, cream and desserts business would continue to be run independently by the Yeo Valley Group.

As one in four households in the UK was purchasing organic products, Arla said there was an opportunity for the UK dairy sector to convert more customers from standard to organic dairy.

“The potential for organic dairy products in the UK is significant and our investment in range through this licensing agreement with Yeo Valley provides a significant opportunity to offer a greater choice to consumers at attractive prices,” said Arla Foods executive vice president and head of Europe Peter Giørtz-Carlsen.

“Our ambition is to encourage customers in the UK to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across fairy categories.”

According to Arla, 4% of all fresh milk sold in the UK was organic, lagging behind other European countries such as Germany (10%), Sweden (16%) and Denmark (29%).

“We’re taking a determined step to make organic dairy products more available to UK consumers as we believe that organic milk has a key role to play as consumers increasingly look for ways to make their diets healthier and more natural,” Giørtz-Carlsen added.

The completion of the acquisition was expected after approval from the UK Competition and Markets Authority.