Arla record positive financials but GB liquid is still its weak link

Arla’s 2019 results were heavily dependant on its continued performance in its branded sales and once again let down by its weak GB liquid market.

Arla’s branded sales grew by 5.1% in 2019 (+3.1% in 2018) and hence brands like its Butterbox and Box are proving very popular with modern consumers.

Diplomatically Arla’s UK MD Ash Amirahmadi commented “we are not immune from the profitability challenges facing the British liquid milk category, which remains a significant part of our business. Performance in this category held back our overall UK results in 2019.”

Given close to 50% of Arla’s UK milk goes into liquid surely as opportunities arise Arla will seek to reduce this exposure to a failing UK Liquid market. That’s a choice Arla can make given its breadth and portfolio, others have limited if any choices.

Both Arla and Muller have reduced costs significantly in the Liquid sector but its still not delivering the sustainable results it should.

Note Arla’s UK business accounts for almost 25% of its revenue.