Strategies and Structures
in the European Dairy Co-operative Industry

By Jerker Nilsson and Petri Ollila

Dairy processing seems to have substantial economies of scale. Moreover a development towards differentiated business gives advantages to large dairy processors. Given these trends, it is hypothesised that dairy co-operatives are gradually losing their raison-d’être as co-operative firms. On the basis of some prior studies, this study discusses the implications that the co-operatives’ growth have for the members. It shows that the trend towards differentiation, large scale operations and internationalisation is so strong that members have difficulties governing and financing the co-operatives. Reorganisational measures may occur among the traditionally organised dairy co-operatives.