Arla Foods has confirmed the boycott of Danish products in the Middle East cost the company approximately DKK400m (US$70.8m) in 2006.
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The company said this was in line with forecasts announced in March when sales of Danish butter, cheese and other dairy products had been at a standstill for some months.
The losses correspond to a shortfall of DKK40,000 for each of Arla’s 10,000 Danish and Swedish co-operative members, the company said.
“This has been a tough time for everyone at Arla Foods involved in our Middle East business,” said divisional director Finn Hansen, Arla Foods. “But nevertheless, it’s a relief that the boycott of our dairy products has come to an end. The religious and culturally conditioned agenda has now been superseded by commercial pressures where we’re facing stronger competition from other dairy companies.”
Hansen expects Arla’s sales to rise during the coming year and that by the end of 2007, sales will have reached pre-boycott levels. If this proves to be the case, the boycott will have pushed back Arla’s development in the Middle East two years.
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