Arla to distribute all of its profits to farmers

The bottling plant at Arla Foods, Stourton, Leeds.
The bottling plant at Arla Foods, Stourton, Leeds.
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DAIRY firm Arla Foods will distribute all 290 million euros (£252 million) of its annual profit to farmers following last summer’s drought across Europe.

The company, home to brands including Anchor and Cravendale, usually only pays part of its profit to farmers, but it is making an exception this year as the industry struggles to pick up the pieces after a hot summer in 2018.

Arla Foods chairman Jan Toft Norgaard said: “As a farmer-owned dairy company we care deeply about the livelihood of our farmers and we see how many of our colleagues have been affected by the drought last summer.

“We have this exceptional opportunity to help them without putting our company Arla at risk and I am proud that we have proposed to do so.”

Arla announced the move last year but is paying out the cash now as it revealed its full-year figures.

They show that group revenue nudged up from 10.3 billion euros (£8.9 billion) to 10.4 billion euros (£9 billion), helped by a wider range of dairy products.

In the UK, its largest market, Arla saw revenues top £2 billion for the first time, rising 3.3% to hit £2.01 billion compared with £1.94 billion the previous year.

However, the firm also flagged “major challenges”, such as volatility in the global milk market and “ongoing uncertainty” brought about by Brexit.

Arla has several sites across the UK, including bases in Devon, Leeds and Aylesbury.

The group is a co-operative owned by 11,200 dairy farmers in the UK, Denmark, Sweden, Germany, Belgium, Luxembourg and the Netherlands.

Last year, Arla Foods revealed that it planned to carry out significant investment at two sites in Yorkshire.

Arla revealed that it planned to invest £1.3m at its site in Stourton, near Leeds, which employs 460 staff. Part of this investment was spent on upgrading milk production lines at the site.

In recent years, Arla has invested more than £5.5m to improve the facilities at Stourton. Arla also employs 400 staff at its head office in Leeds.

Arla also revealed plans to invest around £300,000 on general upgrades at its facility in Settle, North Yorkshire, which employs around 100 staff. Settle produces UHT (ultra-high temperature processing) milk for UK retailers. It also provides products for export to China, Middle East, and the Falklands.