International dairy company Arla Foods has agreed to a new brand licence with food firm Kraft Heinz for its Middle East cheese business.

The agreement gives Arla the right to use the Kraft brand for the next 12 years for its recently purchased cheese business in the Middle East.

It covers markets such as Bahrain, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritius, Oman, Palestine, Qatar, Saudi Arabia, Syria, UAE, Yemen and the Seychelles.

The deal excludes Macaroni and Cheese, and packaged food products that combine cheese and others.

Arla and Kraft Heinz have not disclosed the other terms of the licence agreement.

Arla international zone executive vice-president 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 deal marks the latest step in Arla’s expansion of its business in the Middle East following its acquisition in December of Mondeléz International’s processed cheese business.

The purchase also gave Arla full ownership of a cheese production site in Bahrain, allowing the company to further expand its branded cheese production in the Middle East and North Africa (MENA) region, as well as enhance overall efficiency in its supply chain.

Arla said the MENA region is one of the key geographical regions in its strategy, Good Growth 2020. The company’s retail and foodservice revenue in the MENA region reached €560m in 2018.

Arla Foods is owned by 10,300 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands.

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