Arla counts the kroner after exceptional year for milk

By staff reporter

- Last updated on GMT

Related tags: Arla, Denmark

Arla Foods has reported a sustained level of profit despite a
turbulent year in the milk markets after treading a fine line
between paying its members more for their milk and pricing their
products competitively.

The Danish cooperative has reported profits of DKK 938m (c €125.8m) for the year - on a par with 2006 - and a 4 per cent increase in sales to DKK47.7bn (€6.4bn). CEO Peder Tuborgh said that Arla has succeeded in its two main aims: "to secure our owners a high milk price and offer quality products at competitive price."​ He said that Arla has never experience such a turbulent year, with such fluctuations in milk prices around the globe. As a result of the higher prices, in the second half of the year Arla paid out DKK1.2 bn (€0.16) more than it expected to its members - that is, the dairy farmers who supply it with milk. "The raw material they produce has become much more valuable, so they should benefit,"​ a spokesperson told FoodNavigator.com. When the results are boiled down, Arla has generated 247 Danish ore per kg of milk sourced from members. The equivalent for 2006 was 227 ore per kg sourced. Other factors said to have affected the cooperative's positive year were the integration of Arla Foods UK, Tholstrup Cheese in Denmark and Arla Ingman in Finland. Across all its units the group has also implemented some general efficiency measures. As a cooperative, the lion's share of the profits will be redistributed amongst Arla's members. The supervisory board has proposed the following carve-up: DKK503m (€67.5m)in supplementary payments to members (equating to 8.4 ore per kg milk supplied); DKK174m (€23.3m) for consolidation of supplier-based ownership certificates amongst the c 8,500 members; DKK21m (€2.8m) for reconsolidation; DKK140m (€18.8m) for the company's strategy fund. The supervisory board says it believes this division is a good balance between supplementary balance and consolidation. The board of representatives will meet this week to approve the final accounts.

Related topics: Manufacturers, Arla Foods, Fresh Milk

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