Despite reporting a loss of DKK400m (US$64.09m) to date resulting from the Middle Eastern boycott of Danish goods, Arla MD Peder Tuborgh has said that he still sees a future for the company in those markets.
The loss derives from lost sales revenue from Middle Eastern markets and the fact that surplus milk is currently being sold at a loss as industrial butter and milk powder.
“Our challenge is to regain consumer confidence in the Middle East,” Tuborgh told Arla Foods’ 140 cooperative members and ten staff representatives gathered at the Board of Representatives’ meeting in Aalborg on Wednesday and Thursday (1 and 2 March).
“Despite the difficult situation, we believe that Arla has a future in the Middle East,” Tuborgh added. “Over 40 years, we have worked hard to build our brands in the Middle East in order to provide our cooperative members with a stable income. As a result, we have an intimate knowledge of the market and we will not give up easily.”
Last year, Arla’s turnover in the Middle East totalled DKK3.2bn.