Argentina’s economic crisis is now hitting Arla Foods’ exports of cheese and butter to the Argentinian market.
In December, normally the peak season for sales of Arla Foods’ speciality cheese, sales figures were 30% down on the year. With a noteable downturn in October and November, sales in the last quarter were, therefore, substantially below last year’s.
During the past week, the Argentinian peso has fallen by a further 30%, making imported products more expensive to buy. The falling currency rate will also affect Argentinian customers’ debts to Arla Foods.
”We’re somewhat concerned about the amounts owed by customers,” says Executive Director Jens Jørgen Hjortshøj. ”In the short-term, we’re likely to lose money, but the picture is confused and it’s difficult to assess the full impact.”
As a consequence of the crisis, Arla Foods has introduced a temporary sales and supply stop to some customers. Shipping of export products from Denmark has also been suspended.
Arla Foods’ subsidiary in Argentina has a turnover of approx. DKK 40 million in, primarily, speciality cheese such as Danablu and Emmental and Lurpak butter. The subsidiary also imports processed cheese from Arla Foods’ dairy in Brazil.