The agreement provides Arla Foods with the consent to use the Kraft® brand for the next 12 years in the Middle East on the cheese selection lately obtained by Arla from Mondeléz International.
The markets capped by the license contract include Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritius, Oman, Palestine, Qatar, Saudi Arabia, Syria, UAE, Yemen and Seychelles.
“We are pleased to reach this agreement with Kraft Heinz. It secures an important continuation of the business we have acquired, which is also good news for the millions of consumers in the region who know and love the Kraft branded cheese products. Combining the Kraft cheese portfolio with our own Puck® range will make us a leader in the cheese category as we can offer customers and consumers the two strongest cheese brands in the market,” says Executive Vice President of Arla’s international zone, Tim Ørting Jørgensen.
The new royalty-bearing license grants Arla the right to use the Kraft brand on cheese products with the exception of Macaroni & Cheese and packaged food products containing a combination of cheese and other foods such as cheese and crackers.
The terms of the license agreement are not disclosed.
Expanding Arla’s business in the Middle East region
In December 2018, Arla announced an agreement with American multinational confectionery, food, and beverage company Mondeléz International to acquire its processed cheese business in the Middle East region, which is licensed under the Kraft brand. This deal was formally completed on May 28th, when Arla took over the acquired operations.
The acquisition also gave Arla full ownership of a state-of-the-art cheese production site in Bahrain, which provides Arla with the opportunity to further expand the company’s branded cheese production in the region the Middle East and North Africa (“MENA”) and to further improve overall efficiency in its supply chain.
The MENA region is one of the key geographical regions in Arla’s strategy, Good Growth 2020.
Since 2010 Arla has more than doubled its sales organically across the MENA region, which is the company’s largest market outside Europe, through strong positions in cheese under the Puck® brand, butter and spreads under the Lurpak® brand as well as milk powder and UHT milk under the Dano® and Arla® brands.
In 2018, Arla’s retail and foodservice revenue in the MENA region reached EUR 560 million.