Q & A with Arla Foods amba chairman Åke Hantoft

Swedish farmer Åke Hantoft is chairman of Arla Foods amba. Suzie Horne caught up with him on a recent visit to London

Where is the greatest potential for growth in Europe?

Mainly in Germany and the UK, with some in Finland. We want to strengthen the UK business and secure Arla’s market position in our biggest market by securing future raw milk sourcing. Increasing the size of that milk pool will also make us less reliant on third party supplies (currently about 10% of UK milk supply).

And elsewhere?

Arla will be focussing on three global growth markets: Russia with white cheese and butter; the Middle East and Africa with  milk powder, long life dairy products, cheeses and butter. And in China with milk powder and UHT milk as well as whey protein ingredients.

What further investment plans does Arla have for the UK?

There is an agreement that we try and invest 3% of our turnover every year, whether in new plants, in maintenance of existing plants or in techniques, wherever it is needed, as well as making payments to farmer owners.

The investment policy is to grow with the British market.

Do you think farmer owners need to engage more with the co-op?

I agree farmers need to take more interest. We always have to work with a corporate identity and share strategy – it gives more strength if it is shared at grass roots level.

But we have good engagement in the UK – at members’ meetings we have an attendance of nearly 50% of all members. This compares with 40 to 50% in Germany and Denmark, and 30 to 35% in Sweden.

How will Arla keep its members loyal when its prices diverge from those of other UK milk buyers?

Members can leave for an alternative if they think it is better – every year that happens. But over the long term Arla milk prices in the last three to five years have performed very well.

More: See business profile of Arla CEO Peter Lauritzen

Will Arla consider shorter notice periods for producers to reflect prevailing terms elsewhere in the UK?

As a farmer owned co-operative, our owners invest financially in our business. We are not considering reducing our notice periods for our owners.

Farmers on an Arla direct supply contract are able to give three months’ notice if the milk price is changed.

Where is the milk for the Aylesbury dairy coming from?

Mostly from the south west of England, where we have 1,250 producers, also from Southern England and north of the plant.

When will you introduce the Arlagärden assurance scheme and will it replace Red Tractor?

In 2015 and it will work alongside, not supersede the Red Tractor scheme.

Pic: Åke Hantoft with his wife Anna-Karin on their 450ha farm at Ösarp near Laholm, Sweden