Scandinavian dairy giant Arla Foods may shed up to 700 jobs in Denmark and Sweden.

The move would come as part of the company’s changes to its production of liquid milk, Arla Foods spokesman Louis Honore told AFX. Most of the redundancies would come in Sweden. The Aarhus dairy may be closed in Denmark, while two or three of the company’s Swedish liquid milk dairies may also be shuttered.

Meanwhile the company also said it might only be able to pay its cooperative members much less for milk than previously indicated. It said its income had been hit by slower sales at home as well as from exports. The company is coming under pressure from German hard discounters, namely Lidl in Sweden and Aldi in Denmark. In a bid to counter this competition, Arla recently introduced a new discount milk, Danmaelk.