Arla flies in new team for UK dairy challenge

By Chris Mercer

- Last updated on GMT

Related tags: Arla, Milk

Arla Foods has overhauled its leadership in the UK as it looks to
make a fresh start and improve earnings for its dairy operations in
the country.

Peter Lauritzen, who has headed Arla's ingredients unit for the last 13 years, will be the new chief executive of UK operations. His predecessor, Tim Smith, left by "mutual consent",​ the group announced this week. Lauritzen's appointment is the first major change since Arla Foods' took direct control of its UK arm earlier in the year, and indicates the group is keen to shake things up to raise its performance in the country. A series of investments and efficiency improvements will consume most of Lauritzen's first few weeks in the job, Arla said this week. He is already credited with turning Arla's loss-making business in Saudi Arabia into an expansive Middle East dairy division between 1985 and 1992. More recently, he has successfully expanded Arla's milk powder division. Now comes the UK, in what Lauritzen said was "avery exciting challenge for me to have been offered the opportunity to head up the large-scale integration process and structural development that is ahead"​. Precise details of the restructuring plan remained unclear. A dismal first six months for Arla UK last year saw the group end its three-year strategic plan with a three per cent drop in full year profits. Improvements came in the second half via higher selling prices, more branded sales and the sale of the group's loss-making doorstep delivery business to rival Dairy Crest. But Arla Foods headquarters in Scandinavia had warned mid-way through the year that it was not satisfied with performances in the UK, which is now Arla's largest market and accounts for a third of turnover. Notorious earnings pressure has blighted much of the UK diary industry in recent years, as also demonstrated further down the chain by low farmgate milk prices. Arla has sought to quell growing public concern over farmgate prices by announcing it would pay all members of its Milk Partnership an extra one pence per litre. It is also working with supermarket giant Tesco to implement direct contracts and a new price of 22 pence per litre for 850 suppliers.

Related topics: Manufacturers, Arla Foods

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