Arla Foods increases organic production

Arla Foods' Supervisory has today set a new target for the company's organic production in Denmark. More milk producers have expressed their interest in switching to organic production.

Consumption of organic dairy products in a number of Arla Foods' key markets in Europe, including Denmark, Sweden, the UK and Germany, is on the increase. Consequently, earlier in the summer, Arla Foods asked its conventional milk producers in Denmark to consider switching to organic production. In Sweden, where there is a shortage of organic milk, the recruitment of new organic suppliers began some years ago. A similar recruitment process is now beginning in Denmark.

During the autumn, Arla Foods will reach a point where the company will collect and use 97 per cent of all organic milk produced by the company's Danish milk producers - but demand will continue. Arla Foods estimates, therefore, that over the next few years the company will require a further 75 million kg organic milk over and above the approx. 300 million kg per annum that Arla Foods currently receives in Denmark.

"Interest in organic milk is increasing among our customers and consumers. We have a clear ambition to contribute to organic development in Denmark and Sweden and to fulfil the responsibility that goes with our role as the world's leading organic dairy company," says Peder Tuborgh, CEO, Arla Foods.

As it will take two years to switch from conventional to organic production, the recruitment of new Danish organic producers will begin as soon as possible. 35 Arla Foods milk producers, who together account for an annual milk volume of 37 million kg, have so far registered their interest in becoming organic.

To ensure that there is a sound economic basis in the collection of the milk, which will benefit all Arla Foods' co-operative members, recruitment will be prioritised in relation to where organic milk is already being collected - just as is currently the case in Sweden. New collection areas can emerge if there are several organic producers in a reasonably delimited area.

The Supervisory Board's aim is for recruitment in 2007 to add 25 million kg organic milk up to and including September 2009, while the long-term objective is that a further 50 million kg can be added during 2010.

Facts - Organic milk in Arla Foods

• Arla Foods has approx. 300 organic milk producers in Denmark and approx. 300 in Sweden.
• The expected weigh-in of organic milk in 2007 is expected to total 300 million kg in Denmark and 130 million kg in Sweden.
• Both in Sweden and Denmark, it normally takes two years from the time of the switch until the milk becomes organic. If the cultivation of plants is changed, the process is quicker. During the entire transfer process, Arla Foods uses the milk as conventional milk.
• The Supervisory Board has decided that the current organic supplement of 0.45 DKK in Denmark and 0.56 SEK in Sweden will be maintained into 2008.

Read more about our organic milk products