Arla to pay out up to £280m profits to drought-stricken farmers
The board of dairy firm Arla Foods has proposed paying out its entire 2018 profit to farmers, many of whom are struggling following this summer's drought across Europe.
Arla said that, in light of its "strong balance sheet" and the fact that farmers are facing a "tough financial situation", it is in the firm's best interest for this year's net profit to be paid out to them.
Annual profit is expected to come in between 285 million (£257.6 million) and 310 million euros (£280.2 million).
Arla chairman Jan Toft Norgaard said: "As a farmer-owned dairy company, we care deeply about the livelihood of our farmers and we recognise that this summer's drought in Europe has been extraordinary.
"We are proposing that extraordinary measures be taken in this situation, and the board is satisfied with the positive development of the company's balance sheet, which makes this proposal possible."
Arla is home to brands including Anchor and Cravendale and has several sites across the UK, including in Devon, Leeds and Aylesbury.
It is a co-operative owned by 11,200 dairy farmers in the UK, Denmark, Sweden, Germany, Belgium, Luxembourg and the Netherlands.
The firm usually only pays part of its profit to farmers, but is making an exception this year as the industry struggles to pick up the pieces after a blazing hot summer.
The proposal will be discussed at the next board meeting in October and, if approved, the money will be paid out in March 2019.
"Our balance sheet has improved significantly over the last few years, and the strength of our balance sheet makes room for this extraordinary initiative while still maintaining our investment plans for the continued future growth of the company," said Arla Foods chief executive Peder Tuborgh.