Dairy group Tine is set to slash jobs in a company-wide restructure due to decreased milk consumption in Norway and increasing competition.
Around 30 jobs will be lost at the Norway-based group’s dairy in Ålesund, where milk production will be shut down and moved to another site.
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UHT products such as iced coffee, iced tea, desserts and sauces will still be produced at the Ålesund dairy.
The dairy cooperative, which has 13,000 members, is running five projects as part of a review to save costs.
The review will first focus on 13 of its 24 facilities, affecting around 1,400 staff. It includes warehouses, production and distribution sites and packing plants.
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The initial 30 jobs will be lost in milk production and stock keeping. However, a Tine spokesperson said ten jobs will be created at the Tunga site in Trondheim, which will take on production capacity from Ålesund.
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By GlobalDataThe dairy giant told Just Food the restructuring was due to three issues: decreasing consumption of milk in Norway in recent years, a loss of market share due to increased competition and rising imports, particularly cheese.
The group claimed official subsidies given to competitors over the past two decades have, in part, caused its loss of market share. Tine is Norway’s largest producer, distributor and exporter of dairy products with a total sales revenue of NOK24bn (US$2.4bn) in 2021.
The subsidies were brought in to support smaller suppliers and help them maintain competitive pricing.
Tine claims that these smaller companies have outgrown the need for assistance and called on the Norwegian government to “stop the subsidies to our competitors immediately”. A spokesperson said the company agrees the support was necessary 20 years ago, but not today.
The final number of jobs to be cut is still unknown but Tine expects to conclude the first five cost-saving projects in the first half of 2023. The spokesperson said the company has not yet planned the review of the rest of the company.
Back in 2019, Tine also cited slowing milk consumption and growing competition as reasons for redundancies. It set out plans to cut 400 jobs in a bid to lower costs.
At the time, CEO Gunnar Hovland said: “We must change to preserve. The owners expect measures to strengthen the competitiveness of a dairy market in which Tine’s shares in several categories have been in sharp decline over several years. We will invest in more innovation and in areas of growth.”
