German cereal manufacturer H&J Brüggen and dairy producer Frischli plan to set up a joint venture focused on oat-based food and drink products.

Working together, both companies look to produce a range of oat-based drinks, concentrates and other "functional oat products", to be sold to German retail.

The plan has been submitted to the national federal cartel agency, the Bundeskartellamt.

Upon receiving approval from the competition authority, both groups expect joint operations to begin under the new business in early 2025.

In a statement, Brüggen and Frischli confirmed they would still run their own companies independently following the establishment of the joint venture.

Both groups said the proposed business would combine each other’s knowledge in processing milk and oats products and help them respond to the growing demand for plant-based milks in Germany.

Commenting on the tie-up, Johannes Bruggen, one of the three general managers of the family-run Brüggen, said: “The establishment of this joint venture marks a significant step in our corporate strategy, which focuses on sustainable growth and innovation.”

Dr Timo Winkelmann, managing director at Frischli, added: “By combining our respective strengths and experience, we are ideally positioned to set new standards in the oat drink sector.

“This joint venture will enable us to strengthen our market position and offer our customers even greater added value.”

Set up in 1868, Brüggen processes a range of private-label breakfast cereals, muesli, oat flakes and snack bars to retailers and manufacturers worldwide.

The group manages two factories at its headquarters site in Lübeck, northern Germany. It also owns three other manufacturing sites in Chile, France and Poland. It employs approximately 2,000 people.

Based in Rehburg-Loccum, north-west of Hanover, Frischli processes shelf-stable private-label dairy products, including UHT milks and milk powders, creams and desserts, as well as fresh dairy goods.

As well as its main plant in Rehburg-Loccum, Lower Saxony, the group also owns three dairy factories in Weißenfel in Saxony-Anahalt, Eggenfelden in Bavaria and Schöppingen in North Rhine-Westphalia. The company has around 1,000 employees.