A contract for the acquisition of a majority stake in Cesvaines piens by Smiltenes piens was signed on January 30th of this year. This strategic move aims to reinforce Smiltenes piens' competitiveness in both Baltic and European markets. The Latvian Competition Authority (KP) concluded that the merger will impact the fresh milk procurement market within Latvia, although it left the precise geographical market definition open for interpretation.

In addition to fresh milk, the merger is expected to influence various wholesale markets, including those for hard/semi-hard cheese, fresh cheese, mozzarella cheese, processed cheese, butter, packaged milk desserts in portions of up to 500 grams, and the wholesale market for sour cream. Moreover, the KP's investigation revealed a need to segment these markets further based on modern retail channels and out-of-home distribution (OOH) patterns, which are crucial in understanding the business landscape.

Overall, the competition authority assessed that the merger is favorable and has the potential to enhance Latvia's competitiveness in dairy processing markets, thereby contributing to the broader agricultural and economic landscape. This acquisition not only strengthens Smiltenes piens but also has implications for the overall structure and dynamics of the dairy industry in Latvia, which could lead to better pricing and product availability for consumers in the long run.