UPDATE: GERMANY: Supermarket power prompted FrieslandCampina cuts
A spokesperson for FrieslandCampina said the firm is working out a plan for the coming year
The power of German food retailers has forced FrieslandCampina to shake up its business in the country, including axing over 200 jobs, the Dutch dairy giant has said.
FrieslandCampina said today (10 December) it wanted to make its business in Germany more competitive. A series of changes include modernising three plants and "optimising" production and administration. Some 239 staff will be affected.
"We said in 2011 that revenues and in particular profit was disappointing in Germany because of competition and declining consumption," the spokesperson said. "The dairy market is under pressure. Large supermarkets are dominating the market and increasingly competing on price and we have to find an answer to that ... we want to maintain volumes and the market share of our Landliebe brand, so we had to do something."
The company plans to modernise its facilities in Cologne, Gütersloh and Heilbronn to adapt to an "intensely competitive" dairy sector in Germany.
The spokesperson said FrieslandCampina would invest "millions of euros" in its German operations. "We are not withdrawing, we will invest in production," the spokesperson said. "We want to invest in the existing plants. Later this year we will give more details on this."
The spokesperson declined to give further information on the plans. "We have to go into talks with unions. After that we can give more detail depending on the outcome of the talks," he said. "We are now working out a plan for the coming year and we believe in it. We have to invest in the country and take the measures we want to take to reduce costs and invest in the existing brands."
Germany is FrieslandCampina's second-largest European market after the Netherlands. Germany generates 14% of the company's sales, with the Netherlands contributing 25%.
In August, the company recorded an 8.7% increase in first-half earnings to EUR138m (US$218.8m). CEO Cees 't Hart said the increase was "despite the difficult market conditions in Europe and the steep drop in the market prices for butter and milk powder".
In Germany, sales increased in the first half of the year to EUR656m from EUR633m a year earlier.
FrieslandCampina generates most of its sales in the dairy category. The company has been expanding in the emerging markets, most recently with the acquisition of Alaska Milk Corp in the Philippines. T...
Netherlands-based dairy giant FrieslandCampina will shut a cheese plant in Romania next month....
This report presents profiles of leading foodservice companies in Hungary. Details of the top companies active across the Hungarian foodservice industry are provided, together with the company’s major...
In 2012 Royal FrieslandCampina NV penetrated the Philippine market through the acquisition of Alaska Milk Corporation, one of the largest domestic dairy companies in the Philippines. Through this inve...
Dairy in Thailand industry profile provides top-line qualitative and quantitative summary information including: market size (value 2007-11, and forecast to 2016). The profile also contains descriptio...
- BRICs and beyond: Fonterra, Beingmate partnership
- Consuming issues: The hunger-obesity paradox
- On the money: Hormel still looking for M&A
- On the money: Mengniu hones in on "star" brands
- just-food interview: Agropur CEO Robert Coallier
- Fonterra, Beingmate launch infant formula JV
- Mondelez eyes snacks categories in India
- Parmalat nears Lacteos Brasil acquisition
- UK firm Pasta Reale enters administration
- Italy yoghurt woes lead to Emmi profit warning