Arla UK revenue falls £300M in ‘tough’ markets

By Matt Atherton contact

- Last updated on GMT

Arla UK's revenue dropped £300M in 2016
Arla UK's revenue dropped £300M in 2016

Related tags: International trade, Arla foods

Arla UK’s revenue fell by £300M in 2016, owing to “lower global market prices and unfavourable exchange rates”, as the total group’s revenue dropped 6.8%.

The farmer-owned dairy company said it performed strongly against a “tough backdrop”​ in the UK, after it increased market share in most of its categories. The manufacturer’s branded products’ growth meant Arla UK still played a “positive”​ role in the Arla Foods’s group full-year trading update, it said.

Arla UK’s branded milk grew 12% (£95M) last year, it said. Its lacto-free product range sales were up 18%, while its yogurt sector more than doubled year-on-year sales (116%).

‘Continuing changes in the grocery market’

Arla Foods UK md Tomas Pietrangeli said: “In a year of continuing changes in the grocery market as well as political uncertainty, we were able to deliver a strong set of results by driving growth in the UK through our portfolio of popular products, and delivering efficiencies and cost savings in our supply chain.

“Despite these exciting developments we are, however, conscious of the longer-term context and potential impact of Brexit. That’s why we’re working closely with the wider food and farming industry, and with government, to try and maximise opportunities of Brexit, whilst mitigating potential risks.”

£690M drop in total revenue

The Arla Foods wider group reported a €817M (£690M) drop in total revenue to €9.57bn, last year. It blamed lower sales prices and unfavourable exchange rates for the falling revenue.

The dairy company expected revenue to grow “significantly”​ in 2017, it said.

Arla ceo Peter Tuborgh said: “We are confident that the improved quality of our business, as well as our Good Growth 2020 strategy, put us in a favourable position and will ensure that we are ready to capture the full potential of the market as it continues to evolve and globalise in 2017.

“You will see Arla take an even stronger position in the market as an innovative dairy company that provides natural and healthy food to consumers and customers worldwide.”

Related topics: Dairy

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