Arla Foods: Lurpak maker eyes cuts as it battles rising prices
Arla Foods, the dairy giant behind the likes of Lurpak and Cravendale, has warned it is looking to make cuts of up to €110m (£91.1m) in 2025 as it battles rising prices and consumer uncertainty.
The Danish-Swedish multinational co-operative, which has a large presence in the UK, added it expects to report a revenue of between €14.5bn to €15.3bn this year as a result of high dairy prices.
However, the group warned that those same high price levels, combined with consumer uncertainty, “are expected to pressure branded volume-driven revenue growth” which is projected to fall to just between two and one per cent.
Arla added that it is projecting to make “efficiencies” in 2025 of between €90m and €110m.
The forecasts come as Arla announced a group revenue of €13.8bn for 2024, up from the €13.7bn it achieved in 2023.
In the UK, branded revenue increased by £89m but overall revenue in this country fell by 2.9 per cent year on year.
Arla said the decline followed “changes in the external landscape such as lower prices and overall milk volume declines, plus adjustments to private label volumes”.
The results come after Arla faced calls for a boycott in November 2024 after it announced it would test Bovaer, a feed additive, on some of its cows in the UK.
The boycott was due to misinformation about the safety of Bovaer.
Arla UK boss hails ‘strong year for brands’
Bas Padberg, managing director of Arla Foods UK, said: “2024 was clearly a year of strong branded growth, which really highlights the power of the portfolio and product mix we have, as shoppers look for quality, nutritious and tasty products.
“As a cooperative, everything we do is to drive the best possible returns for our owners, so through strong collaboration and the support of the farmers, our customers and the whole business, means we can give back to our farmers for the hard work they do in producing our food and investing for the future of the dairy industry.
Padberg added: “As a nutrient dense food, milk can play an important role in contributing to a healthy, balanced diet.
“Supporting people with access to quality dairy products is something we are hugely passionate about and will continue to do into 2025.”