Milk Link, the farmer-owned dairy co-operative with a substantial membership in the South West, has further strengthened its position as a leading integrated dairy business.

As South West Farmer went to press it announced it had taken over control of Peninsula Milk Processors Limited ("Peninsula") - the fresh liquid milk processor based in Okehampton, Devon.

The deal is subject to certain resolutions being passed at an extraordinary general meeting of Peninsula.

Barry Nicholls, Milk Link chief executive, told South West Farmer: "Our objective is to deliver long-term financial security to our members and the acquisition of Peninsula is the next step in achieving our strategy of becoming the UK's leading farmer-owned integrated dairy business. The Peninsula facility offers us a new, well invested asset base right in our membership heartland and has been described by Defra as an "example of best practice under the Objective 5B programme". By increasing our processing capacity in the South West, we are able to reduce transportation costs while providing a platform for regionally branded products."

Peninsula produces fresh milk, and fresh clotted creams for major retail, catering and manufacturing customers.

The deal will complement the recent acquisition by Milk Link of Newlands Farm Limited, another liquid milk processor, based in Liskeard, Cornwall, announced in December. Milk Link says it will build upon its strong customer base and believes that retailers will see considerable benefits from partnering with an integrated farmer-owned dairy business.

Regional benefits of the Peninsula acquisition include Milk Link maintaining its core operation in its South West membership heartland and a strengthened local economy through increased processing capacity of its members' milk.

The acquisition of Peninsula is said to secure demand for 30-50 million litres per annum of Milk Link output with the additional benefit of very low transport costs.

Both recent take-overs are strategically important investments for Milk Link. They offer the opportunity to develop regional branded opportunities in consumer products. They also complement Milk Link's existing liquid milk business based in Scotland, Essex and Crediton, in Devon.

* Milk Link is owned by around 2,400 British dairy farmers who produce around 10 per cent of the UK's annual demand for milk - 1.4 billion litres.

Peninsula Milk Processors was established in 1997 by a group of farmers from Devon and Cornwall. It processes, bottles and manufactures a range of fresh milk and fresh liquid and clotted creams at its three acre site in Devon.

Newlands Farm is an independent regional dairy which has been supplying the full range of fresh milks and creams to retailers in Cornwall, Devon and Somerset since 1990. It is based at Pensilva, near Liskeard, Cornwall and has more than 600 customers in the retail, catering and manufacturing sectors. It employs around 85 people and has an annual turnover of around £7.5m.