Jarlsberg exports will become 'unprofitable' if Norwegian subsidies removed: TINE


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Jarlsberg exports will become 'unprofitable' if Norwegian subsidies removed: TINE

Related tags International trade

Norwegian dairy TINE has warned that exporting Jarlsberg cheese could become unprofitable if the country's government phases out export subsidies. 

In a statement, Oslo-based TINE - Norway's largest dairy - said there could be "consequences for Jarlsberg and 750 Norwegian dairy farms"​ if the proposed removal of export subsidies is pushed through.

Norwegian Minister of Foreign Affairs, Børge Brende, last week presented a white paper that outlines the country's "trade policy priorities in a changing global economy."

"In order to ensure the strength of the economy, we need to make active use of the opportunities in existing trade agreements," said Brende. "We also need to negotiate more and better agreements along several tracks, but firmly rooted in the multilateral trading system."

To help facilitate this, Oslo plans to phase out all export subsidies by the end of 2019, including the one covering cheese. 

TINE sold more than nearly 44,500 tonnes of dairy products outside Norway in 2014 - 75% of which was produced under license in countries including Ireland and the US.

Of the 11,689 tonnes produced in Norway and shipped to countries including the US, Australia and Canada, 90% was Jarlsberg cheese.

"If this becomes a reality, it will have consequences for Jarlsberg,"​ said Lars Galtung, communications director, TINE. "Exports from Norway will be unprofitable and it will be a challenge when 25% of Jarlsberg sales abroad come from Norway."

TINE’s production of Jarlsberg cheese in Norway is currently spread 60/40 across its plants in Elnesvågen and Jæren. 

It could be forced, however, to "evaluate alternatives to supply the international market with Jarlsberg" ​if the proposed abolition of export subsidies is pushed through.

"Moreover, it could have negative consequences for up to 750 Norwegian dairy farms," ​Galtung added.

"We need to consider thoroughly the challenges this brings and how we can address these in order to maintain the position Jarlsberg has," ​he added.

Related topics Manufacturers Cheese

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