UK dairy processor Arla Foods UK has said it has continued to perform in line with the board’s expectations for the year ending 30 September, but added that it planned to close two dairies next year.
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The company, which was formed last year through the merger of the UK’s Express Dairies and the UK unit of Danish-Swedish agricultural cooperative Arla, said it anticipates the closure of its Ruislip dairy (West London) in January 2005 and its Newcastle-upon-Tyne dairy in May 2005.
The closures, which will result in the loss of more than 400 jobs, form part of the company’s plan to integrate its operations after the merger.
In its trading update, Arla Foods said that over the last year, its brand performance has been “exceptionally strong”. In the butter, spreads and margarine sector, Lurpak saw 11% growth in the last year while Anchor grew 1%, continuing its recovery. The Cravendale fresh milk brand grew by 34% in the key supermarket sector but still only accounts for 3.5% of that market.
Arla said the supply of own label fresh milk to supermarkets remains highly competitive and challenging but it has now secured its major volumes for the coming financial year. After the announced changes of contracts with the major retailers the group has gained a net 80 million litres and has held its market share in the supermarket fresh milk sector since the merger in October 2003.
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By GlobalData
