Arla’s Interim Results Affected by Middle East Boycott 

16/08/06 Arla Foods, Europes’a largest dairy company has said that the consumer boycott of Danish products in the Middle East has affected its interim results. Half-year profits of DKK 238 million (USD 41 million) for 2006 are approx. DKK 100 million (USD 17 million) below budget. This is, however, in line with the forecast prepared at the start of the Middle East crisis.

Sales have now returned to pre-boycott levels in most Gulf states with the exception of Saudi Arabia, Arla Foods' largest market in the region. Here, sales remain sluggish, albeit with a slight increase.

"Reports from the market confirm previous expectations that Arla Foods faces a loss of earnings in the region of DKK 400 million (USD 69 million)," says Group Finance Director Jørn Wendel Andersen.

Arla Foods' Managing Director Peder Tuborgh states that Arla Foods remains committed to its strategy plan aimed at securing the best possible milk price for its co-operative owners - the Danish and Swedish dairy farmers.

"The acquisition of the Danish Tholstrup Cheese fits in well with Arla Foods' strategy of further developing the speciality cheese category. The Supervisory Board's recent decision to expand the feta and mozzarella production in Denmark is linked to this," says Peder Tuborgh.