Struggle over milk prices creates “tough situation” for Arla Foods
“GLOBALLY declining” milk prices have impacted Arla Foods’ results.
The firm said that recent struggles over the price of milk had created a “tough situation” for Arla and their farmer-owners.
Revenue for the first half of 2015 dipped to £3.76bn (€5.13bn) compared to £3.90bn for the same period last year.
Profit for the period was down to £84.9m from £107m.
The firm said that a downward turn on world dairy prices, caused by a stagnation of imports to China, as well as Russian embargoes on EU dairy products, led to this decline.
European milk production increased after EU quotas were relaxed, but this oversupply and lack of demand meant that milk prices per kilogramme of milk dipped to 24.8p compared to 30.5p in 2014.
Peder Tuborgh, chief executive of Arla said: “We are doing everything we can to minimize the effects of the general global market situation, however it cannot change the fact that our farmer owners are in a tough situation right now.”
Earlier this year Arla announced that it was to spend £15m on marketing across its operations in a bid to counteract the declining demand for dairy products.
The firm is a global dairy company and co-operative owned by 13,500 dairy farmers, around 3,000 of whom are British, and whose UK headquarters are in Leeds.
