Another Food Company Records Giant Loss

European dairy processor Arla Foods has joined scores of other food industry giants who have said the global economic crisis is severely affecting profit.

Arla announced a downturn in its profit of almost £236m yesterday – £202m of which it attributes to the fall in the Swedish krona, sterling and Danish kroner.

Its actual profit was £31m from January to June 2009.

Arla said it had seen a major imbalance between supply and demand for dairy products since the economic crisis, while milk prices still remained the same.

According to CEO Peder Tuborgh, the company had set aside £118m for projects deliverable in the second half of this year to offset problems seen in H1.

“The half-year results are in line with our budget,” Tuborgh said.

“The economic downturn is more extensive and prolonged than expected and has impacted all Arla’s markets.”

Tuborgh said Arla has made no concrete predictions for when its hardship might end.

He said while positive signs could be seen in the market uncertainty still existed and that Arla is being proactive in saving until demand rises again.

By Penny Jones