Arla Foods to cut jobs despite £90m investment plans
Arla Foods, the dairy giant behind brands such as Lurpak and Cravendale, is to close one of its UK sites with the loss of up to 128 jobs.
However, the co-operative also confirmed plans to invest almost £90m into its Lockerbie site in Scotland.
The news comes after City PM reported last week that Arla Foods is looking to make “efficiencies” of up to €110m (£91.1m) in 2025 as it battles rising prices and consumer uncertainty.
The Danish-Swedish multinational co-operative, which has a large presence in the UK, added it expects to report a revenue of between €14.5bn to €15.3bn this year as a result of high dairy prices.
The latest investment drive from Arla Foods comes after it set aside £300m for site improvements in 2024, which included a £34m investment into Lockerbie’s cheddar production.
The group said the latest investment project would help create a ‘centre of excellence’ for the production of UHT and Lactofree milk at Lockerbie.
However, it added that “is a potential impact for some colleagues based at its Stourton site, and all colleagues at its Settle site, which Arla proposes to close”.
‘We understand that this will be a time of uncertainty’ – Arla Foods boss
Fran Ball, vice president of production at Arla Foods, said: “The proposals announced today form part of our strategy to strengthen our manufacturing network and future-proof dairy production in the UK, and whilst this is an exciting announcement for Lockerbie our priority right now is to support our Yorkshire colleagues.
“At Arla we are committed to supporting everyone through periods of change and we understand that this will be a time of uncertainty for colleagues who work across our Yorkshire sites.
“We will be entering into a period of consultation with everyone affected by these proposals, announced today.”
Bas Padberg, managing director of Arla Foods UK, added: “The proposed investment into Lockerbie showcases our commitment to driving change in the UK, and supporting the future of British dairy. There is an increasing focus on the role the UK food industry plays in helping to tackle the health crisis and provide good food to nourish a growing population.
“We are aware that this proposal has the potential to impact colleagues across some of our UK sites, and our priority is to support them through this challenging time.”
Arla Foods UK board director, and Arla farmer, Arthur Fearnall, said: “We are incredibly proud to see this significant investment proposed for Arla’s Lockerbie site.
“We’re excited to see how this progresses over the coming years as we continue to work together to ensure all Arla farmer owners receive the best price for their milk.”