Arla bosses say ‘no empty dairy shelves’ amid Brexit teething issues

Henry Saker-Clark, PA City Reporter

Bosses at Arla said empty dairy shelves have been avoided despite the company tackling “teething issues” following Brexit.

The dairy giant told PA that it has seen cost rises and an increase in paperwork since the start of the year but has been able to avoid major disruption amid the trade agreement with the EU.

Ash Amirahmadi, managing director of Arla UK, told the PA news agency that the trade deal helped the company avoid major tariff impacts, although it is “too early” to work out the full cost impact of Brexit.

“We are very positive that a deal was done and that provided a level of stability,” he said.

“We are now looking past the deal and are happy to see how things are progressing, other than a few teething issues.

“Customers will see that we’ve been able to keep supply really strong and makes sure we don’t have empty dairy shelves.”

ArlaAsh
Arla’s UK managing director Ash Amirahmadi (Arla/PA)

Nevertheless, he said the company has had to deal with “25,000 extra bits of paperwork” as a result of the country’s exit from the EU.

The group said Brexit has added some initial cost, as the company also takes on additional cost pressures from the pandemic and challenging farming conditions.

Costs for its farmers have jumped on the back of a poor harvest last year and very wet weather, which is impacting the current growing season.

It said this had resulted in less grass and cereals for cows to eat over the winter when they are indoors, with an estimated 6% increase in production costs as a result.

Arla stressed that it also pumped investment into safety protocols following the onset of the pandemic, with distancing measures and full pay for isolating colleagues.

However, it has seen the pandemic drive a shift towards greater customer retail demand as more meals are eaten at home.

It said sales for cheese and butter have been particularly strong over the past year as changes towards more homeworking resulted in extra breakfasts and lunches being eaten at home.

Arla UK posted revenues of £2.12 billion for 2020, up from £1.95 billion in the previous year.

It reported a 13% jump in branded revenues as sales of its Lurpak and Cravendale brands grew by double figures as customers sought well-established names.

Simon Ho, UK finance director, said: “I’m very proud that we can look back at our 2020 results and see the positive impact of our flexible approach to business, in what was a very challenging year.

“Around 50% of Arla’s products were impacted by production decisions needed to keep our colleagues safe during coronavirus and to ensure there was enough dairy in fridges to help feed the nation.”

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