Arla Banking on Dairy Market Turnaround in First Half of 2016

EU – European dairy processor Arla is expecting world dairy prices to turn around in the first half of 2016 seeing its revenue fall 3.8 per cent.
calendar icon 2 September 2015
clock icon 1 minute read

The company acknowledged the first half of 2015 had been “very hard” for its suppliers following an unpredictable dairy market placing “heavy pressure” on world prices.

In its interim report, Arla announced it had been forced to reduce investments by 30 per cent.

This followed a 53.1 per cent fall in whole milk powder prices on the global commodity market to levels not seen since 2009.

The report showed first half revenues fell on the prior year to €5.13 billion, expected to reach €10.2-€10.3 billion across the whole year.

Good news came with regard to its key global brands: Arla, Lurpak and Castello, which grew 2.4 per cent.

Lurpak did “especially well” through larger market presence across Europe and in the Middle East and Latin America.

“The global dairy market has rarely been as unpredictable as now, and unfortunately 2015 is proving to be as challenging as we anticipated,” said Peter Tuborgh, CEO of Arla Foods.

“Our long-term view is that the market will turn again in the first half of next year, which is why we will stay focused on our strategic agenda.”

He added that, even with milk intake up seven per cent, Arla maintained its industry trading sales share at 20-22 per cent.


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