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Arla's £200m profit – on a lower milk price

DESPITE GLOBAL price pressure, Arla enjoyed a significant rise in its turnover in 2012 – up 15% to £7.4 billion – fuelled by mergers, acquisitions and strong brands.

The multinational's net profit amounted to 3% of that turnover, a cool £200 million, the highest in Arla's history.

But behind this figure, Arla admitted that returns to its 12,300 cooperative members across UK, Sweden, Denmark, Germany, Belgium and Luxembourg were 4% lower than in 2011.

"Our performance price is below the 2011 level, but it should be noted that it is at the high end of the European spectrum for dairy companies, which have all had to operate under the same market pressure," said Arla Foods chief executive Peder Tuborgh.

"We fully appreciate that the ratio between our members' earnings from milk production and on-farm costs is, currently, extremely strained. Arla is generating as much profit in its operating markets as possible right now, but in 2012 the high cost of energy and feed for the cows meant that, for some, the milk price did not sufficiently cover the cost of operations on the farm. This has the full attention of Arla's management."

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