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Arla Foods to explore Indian markets

Press Release   •  Jan 31, 2003 14:31 CET

Crown Prince Frederik of Denmark heads Danish trade delegation.
Over the coming week Arla Foods will take a closer look at the opportunities for exporting dairy products to one of the world’s largest populations, India. As a member of a Danish trade delegation headed by Crown Prince Frederik, Export Manager Peter Storm Laursen will meet with representatives from India’s two largest multiples, FoodWorld and Nilgiris as well as with three local wholesalers who are currently selling Rosenborg cheese, Lurpak butter and Buko processed cheese.

Exporting to India, however, presents a number of challenges, not least due to substantial tariffs for dairy products. In addition to basic customs levels of 35 % a further levy of 16 % applies to imported retail dairy products. Although traditionally large consumers of dairy products, the majority of Indians will not be able to afford imported high-quality dairy products such as Lurpak butter. On the other hand, with an estimated 235 million Indians belonging to higher-income households, sales prospects in the longer-term could be substantial. Moreover, this segment is expected to double within the next five years.

“If just some of these would buy cheese and butter of a better quality, the opportunities could be tremendous,” said Peter Storm Laursen.

A further impediment, however, is the retail structure with a very large number of small local shops, which makes distribution more complex.