Arla Foods has closed its Kißleg dairy site in Germany, saying that the site is no longer economically viable.
The decision follows a massive fall in prices and strong pressure from competition in international markets, and affects 38 jobs.
“This was not an easy decision to take,” said Winfried Meier, senior vice president in Arla Foods Central Europe
As a cooperative, Arla’s main aim must be to continue to pay a competitive milk price both to its farmer-owners and to suppliers in the Allgäu area. However, as Winfried Meier explains, this can only be achieved if Arla makes its business in the Allgäu area more profitable in the long term.
From early 2016, the Arla Foods local brand “Allgäuland” will be available in shops again as part of this business plan. Initially, milk and a few other soft cheese and butter products will be marketed under this well-known brand.
The background for the closure is a fall in demand for the hard cheese called “MonRocco” produced in Kißlegg.
“Over the past three years, competition has intensified dramatically. In Eastern Europe in particular, “MonRocco” can be produced much more cheaply than is possible at the Kißlegg site,” explained Winfried Meier.
“Recently, opportunities to sell this product and still cover costs have been severely restricted. The cheese shop attached to the plant will also be affected by the closure,” he said.
Source – The Dairy Site