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Arla announces March milk price hold and strong UK revenue growth

Arla has confirmed it will hold its milk price for March 2019 as it announced strong growth in its UK business across its brands.

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Arla announces price hold and revenue growth

The manufacturing price per litre remains at 30.24ppl from March 1 with European milk volumes ‘under pressure’ and keeping the European commodity market ‘relatively stable’.

 

The liquid price was 29.07ppl.

 

But the on-account price for organic milk will decrease by 0.90ppl to 43.55ppl with the adjustment for those using an EU granted exception to use non-organic forage remaining at 3 euro cents per kg.

 

Markets

 

Arla Foods amba board director, and farmer owner, Johnnie Russell, said: “Overall European milk volumes continue to remain under pressure, with volumes in Netherlands, Germany and France all being lower than last year.

 

“This has kept the European commodity market relatively stable into the first quarter.

 

“Against expectations, butter prices have also held firm into the new year but have started to soften in the last few weeks.


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“SMP prices have continued to increase in the face of strong global demand, whilst cheese prices are also firmer than normal for this time of year.”

 

Growth

 

The dairy also revealed strong growth in 2018, with UK revenues reaching £2.01 billion in 2018, up 3.3 per cent year on year.

 

The food service part of the business was a major driver of overall performance, with Arla Pro growing by 49.3 per cent.

 

Arla branded products grew 8.6 per cent with the B.O.B brand growing 39.2 per cent. Arla Organic sales were up 80 per cent.

 

Other categories with a particular emphasis on health and nutrition that enjoyed significant growth included Arla Big Milk, Arla Protein and Arla Lactofree, with the latter launching new cottage cheese and brie lines in 2018.

 

It added its partnership with Starbucks continued to ‘go from strength-to-strength’ following the announcement of a 21-year deal, with sales going up by 17.8 per cent in 2018.

 

Performance

 

Ash Amirahmadi, Managing Director, Arla Foods UK, said Arla had performed well in the UK.

 

He said brands such as Lurpack and Anchor had ‘maintained and enhanced their positions as consumer favourites’ with product innovation enabling them to tap into growing consciousness of health, nutrition and sustainability.

 

“Starbucks has in many ways been the star performer this year, with strong growth underlining how we are moving dairy into the soft drink and impulse category.

 

“Arla is also looking at new sales channels with a move into direct to consumer with the launch of Arla Baby & Me Organic which is showing really good progress in its early months.

 

“We continue to face major challenges, such as volatility in the global milk market and on-going uncertainty about Brexit.

 

“Despite these factors, we have delivered strong a performance and have been able to return all of the net profit for 2018 to our farmer owners, showing the benefits and resilience of our cooperative, farmer-owned model.”

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