Arla Foods delivers ‘strong performance’ against a backdrop of economic challenges

Tomas Pietrangeli, managing director, Arla Foods UK
Tomas Pietrangeli, managing director, Arla Foods UK
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ARLA Foods, the farmer-owned dairy company, said it had performed strongly last year against a tough backdrop.

Arla’s overall revenue in the UK decreased from 2.5bn euros in 2015 to 2.2bn euros in 2016, which Arla said was a result of lower global market prices and unfavourable exchange rates.

A spokesman said: “As with the Arla Group, the UK business was not immune to challenges facing the global dairy industry, but with the growth from its branded portfolio, this enabled the UK to play a positive role in the group performance.”

Arla Foods UK, which employs around 1,000 staff in Leeds, is focusing on developing its three strategic brands: Arla, Lurpak and Castello.

Arla aims to turn the Arla brand into a household name by 2020. In January, Arla launched ASDA Vitamin D milk, a fortified fresh milk. Morrisons Milk for Farmers, which was launched in 2015, accounts for around 15 per cent of sales within the categories that it competes in, Arla said.

Tomas Pietrangeli, the managing director, Arla Foods UK, said: “In a year of continuing changes in the grocery market as well as political uncertainty, we were able to deliver a strong set of results by driving growth in the UK through our portfolio of popular products, and delivering efficiencies and cost savings in our supply chain.

“We maintained our commitment to innovation with a number of new and exciting product launches which achieved listings and consumer impact early on, and are performing well.

“Despite these exciting developments we are, however, conscious of the longer-term context and potential impact of Brexit.

“That’s why we’re working closely with the wider food and farming industry, and with Government, to try and maximise opportunities of Brexit, whilst mitigating potential risks.”

In 2017, Arla will continue to champion British dairy to help generate greater returns for its farmer owners, Mr Pietrangeli said.

Europe is Arla’s main commercial zone, which contributed 66 per cent of group revenue in 2016.

The UK is the largest market within the Europe zone, and accounts for 25 per cent of group revenue.