The agreement gives Arla Foods the license to use the Kraft brand for the next 12 years in the Middle East on the cheese portfolio acquired by Arla from Mondelēz International.
The markets covered by the license agreement include Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritius, Oman, Palestine, Qatar, Saudi Arabia, Syria, UAE, Yemen and the Seychelles.
Executive vice president of Arla’s international zone, Tim Ørting Jørgensen, said, “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.”
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 have not been disclosed.
Expanding in the Middle East region
In December 2018, Arla announced an agreement with American multinational confectionery, food, and beverage company Mondelēz 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 28, 2019, 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 Middle East and North Africa region, 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, 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 €560m ($632m).
