400 million Euro cost saving target over 3 years for Arla

Arla has publicised its “calcium” cost cutting programme where the aim is to reduce cost by an eye watering 400 million Euro and the target is for 300 million (£263 million) of these savings to be returned to its 11,200 farmer members with the remaining 100 million Euros of savings to be re-invested in the business.  This equates to an extra £23,500 per member assuming the savings targets are achieved.

Arla senior management are certainly under intense pressure to deliver better milk prices to members in all 7 countries and many in mainland Europe are very unhappy about the hit the weaker pound is having in this post Brexit vote period, which is estimated to have cost the co-op around £130 million plus.  One key person commented to Ian “Arla’s GB operation and members are a real pain in the A”

It’s a big number with a huge internal transformation plan and will inevitably result in job losses and potentially premises closures.  At least Arla are doing something big and positive in an effort to boost the co-op’s performance whether it will come quick enough is debatable.