Arla Foods has secured a deal to be the exclusive supplier of private-label liquid milk to Morrisons, the UK’s fourth-largest grocer.
The European dairy cooperative already supplied Morrisons with the “majority” of its own-label milk, a spokesperson for the retailer said.
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However, the new contract, starting in March, will see Arla take on listings handled by rival Muller.
An Arla spokesperson described the deal as “very welcome news”.
In a statement, Steve Newbould, head of dairy trading at Morrisons, added: “We believe this agreement will be simpler for our business and will help to develop a sustainable dairy sector.”
In February, Arla reported a 6.8% fall in its annual revenue to EUR9.57bn (US$10.5bn). The company said the decline was “a direct result of lower sales prices in the global market due to high milk volumes in Europe in the first half of 2016 as well as unfavourable exchange rates”. Arla’s net profit jumped 20.7% to EUR356m.
CFO Natalie Knight told just-food Arla expects its annual sales to grow by around EUR1bn in 2017 but driven in the main by price increases.
