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Thread: Arla

  1. #1
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    Arla

    There's a new Arla contract, said to be fully compliant with the Dairy Industry Voluntary Code.

    The new ‘Arla Direct’ contract at a current standard litre price of 30.02ppl is a part of the overall milk sourcing model’. It incorporates liquid and compositional variations, a volume bonus for larger producers, seasonality options and a 12 month notice period with the three month trigger as specified in the Code. It will be available to producers not already supplying Arla from March 1 - although in reality few would probably be in a position to take it up.
    Arla Foods launches direct milk supply contract, Farmers Guardian

  2. #2
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    Re: Arla

    Quote Originally Posted by malcolm View Post
    There's a new Arla contract, said to be fully compliant with the Dairy Industry Voluntary Code.



    Arla Foods launches direct milk supply contract, Farmers Guardian
    Interesting!
    Arla press release - http://www.arlafoods.co.uk/media/#/p...ontract-837902

    There's some difficult decisions to make this make this year. It's going to be interesting to see how they sell it all to us!

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    Re: Arla

    Standard litre just over 30p for directs, while the owners of the business still being screwed at less than 30p! When are the owners going to be achieving +30p(standard litre) Farmer on a Bike?

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    Re: Arla

    When the market will return it?

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    Re: Arla

    Ha you mean when arla stop screwing you all !

  6. #6

    Re: Arla

    Quote Originally Posted by St Piran View Post
    Standard litre just over 30p for directs, while the owners of the business still being screwed at less than 30p! When are the owners going to be achieving +30p(standard litre) Farmer on a Bike?
    The European market is not lifting as had been hoped/expected but arla has to react in the uk. As a member of the council of representatives, I am going to a meeting in Sweden next week where we need some answers. Previously we were told to expect a price increase in 'the spring', next week we should learn more.

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    Re: Arla

    Quote Originally Posted by dinderleat View Post
    When the market will return it?
    The market has been returning it since they took us over in October (spot milk 37p-42p. The money they have made out of our milk since then would more than recover the payment they made to us in October. So your happy as an owner being paid less than a direct? Would you pay your workman man than you pay yourself?

  8. #8

    Re: Arla

    Quote Originally Posted by St Piran View Post
    The market has been returning it since they took us over in October (spot milk 37p-42p. The money they have made out of our milk since then would more than recover the payment they made to us in October. So your happy as an owner being paid less than a direct? Would you pay your workman man than you pay yourself?
    In answer to last part first, no. But spot milk is only bits of marginal milk wanted to fill a contract, just as spot milk at Christmas or may can be 10ppl, it doesn't mean it all receives that price. The cheese market here is under pressure from Irish cheese and it is a struggle to get any increase in price. If Milklink had not merged the milk price would probably be little different and to what we are getting now, although that is now irrelevant.

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    Re: Arla

    Quote Originally Posted by Farmer on a bike View Post
    In answer to last part first, no. But spot milk is only bits of marginal milk wanted to fill a contract, just as spot milk at Christmas or may can be 10ppl, it doesn't mean it all receives that price. The cheese market here is under pressure from Irish cheese and it is a struggle to get any increase in price. If Milklink had not merged the milk price would probably be little different and to what we are getting now, although that is now irrelevant.
    Surely our milk price would of at least been in line with DC not lagging 1.5-2p behind, after all they are selling cheese in the same markets as we are? And yes we need more than answers from Sweden, we need action, a price rise now and a 13th payment starting from 1st of jan this year. A cornish spring starts in Feb.

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    Re: Arla

    milklink where always 0,5p more than wiseman last year
    Quote Originally Posted by Farmer on a bike View Post
    In answer to last part first, no. But spot milk is only bits of marginal milk wanted to fill a contract, just as spot milk at Christmas or may can be 10ppl, it doesn't mean it all receives that price. The cheese market here is under pressure from Irish cheese and it is a struggle to get any increase in price. If Milklink had not merged the milk price would probably be little different and to what we are getting now, although that is now irrelevant.

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    Re: Arla

    Quote Originally Posted by big philip View Post
    milklink where always 0,5p more than wiseman last year
    When did you start getting 30.5 1st feb?

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    Re: Arla

    Quote Originally Posted by St Piran View Post
    Surely our milk price would of at least been in line with DC not lagging 1.5-2p behind, after all they are selling cheese in the same markets as we are? And yes we need more than answers from Sweden, we need action, a price rise now and a 13th payment starting from 1st of jan this year. A cornish spring starts in Feb.
    Would hope to be 2ppl above Dc, I would think the arla milk link side of arla amba would be more than pulling its weight in contributing to the overall profit of arla amba.

  13. #13

    Re: Arla

    DC sell branded cheddar under the cat city and davidstow brands, they got rid of there own label stuff to first milk. Last year they made good money from cheese and paid what they needed to, to maintain there milk supply. They now need more milk and see an opportunity over they next few months to sign up more milk. The price they are currently paying reflects that. Arla Milklink's cheese business makes top quality own label cheese plus a small amount of branded, so most of there market is open to Irish competition, similar to first milk. Milklink had good reasons for joining arla, rather than continuing to go it alone. Because of the action of last summer and autumn there has been a significant shift in the value of milk for liquid vs cheese, normally the milk for cheese price catches up but this time the UK price is ahead of most of Europe so there is the potential to suck in imports. All of that is relevant to the old Milklink pricing system, but is, fortunately, irrelevant going forward, or at least is only 10% relevant.
    I agree that spring is February/march to me but not so sure that's what spring means to a Dane or swede.

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    Re: Arla

    So FOB when you go to Sweden next week what questions are you going to ask?
    Here are some of mine for some ideas. Does the Arla amba board actually want our milk or did they just want our factories/brands?
    Or do they actually need our milk, but feel that as we have been promised "jam tomorrow" for so long that a few more years won't matter? Do they actually recognise us as "Owners" or a mere inconvience as they seem to treat directs alot better?

  15. #15

    Re: Arla

    This year,Ash & Ronald seem to be going to fight it out to secure the milk they require.
    It will be interesting to see what develops.

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    Re: Arla

    How many people fly to Sweden?.... What's the cost of this? why not all just skype/email/online secure meeting.... when will our industry catch up with efficient modern business?

  17. #17

    Re: Arla

    Quote Originally Posted by Einstien View Post
    How many people fly to Sweden?.... What's the cost of this? why not all just skype/email/online secure meeting.... when will our industry catch up with efficient modern business?
    10 BoR members and 2 directors from UK. These meetings are 3x per year and the actual meeting time is close to 12hours in total each time. The meeting is run with simultaneous translation into 4 languages. How could you make the suggested technology work for a council of 140?

    we do use conference calls and video conferencing between our group in the UK, but it becomes too difficult above about 15 people. Unfortunately democracy does have some financial cost but in ppl it is minute.

  18. #18

    Re: Arla

    Quote Originally Posted by kernowstar View Post
    So FOB when you go to Sweden next week what questions are you going to ask?
    Here are some of mine for some ideas. Does the Arla amba board actually want our milk or did they just want our factories/brands?
    Or do they actually need our milk, but feel that as we have been promised "jam tomorrow" for so long that a few more years won't matter? Do they actually recognise us as "Owners" or a mere inconvience as they seem to treat directs alot better?
    Do they actually recognise us as "Owners" or a mere inconvience as they seem to treat directs alot better?[/QUOTE]
    If they do they should recognize that we have lost out significnately by our moving to the bottom of the league tables.we have given them cheap milk for the plants in the uk that they cannot supply and by doing so created more profit for them ,they need to recognize this immediately and put us on the full AMBA price as this is the fairest way to everyone .if not they risk there milk supply as we can move and they will have to replace it with uk milk.there may only be afew notices in at the moment but 100,s are waiting to the last week to make there choice .once gone we will be reluntant to come back.we have the ultimate power as without milk there factories lose money and the uk makes a large % of there margin.

  19. #19

    Re: Arla

    Quote Originally Posted by fir tree View Post
    Do they actually recognise us as "Owners" or a mere inconvience as they seem to treat directs alot better?
    If they do they should recognize that we have lost out significnately by our moving to the bottom of the league tables.we have given them cheap milk for the plants in the uk that they cannot supply and by doing so created more profit for them ,they need to recognize this immediately and put us on the full AMBA price as this is the fairest way to everyone .if not they risk there milk supply as we can move and they will have to replace it with uk milk.there may only be afew notices in at the moment but 100,s are waiting to the last week to make there choice .once gone we will be reluntant to come back.we have the ultimate power as without milk there factories lose money and the uk makes a large % of there margin.
    they do recognise us as owners and I agree with what you say.

  20. #20

    Re: Arla

    Quote Originally Posted by Farmer on a bike View Post
    they do recognise us as owners and I agree with what you say.
    that's a positive start, lets hope they are as positive and produce the goods, as small tokens will be seen as PR to stop us handing our notices in and lock us in for another 2 years and not many will fall for that a second time.

  21. #21

    Re: Arla

    The problem is, that there was a cost to Arla ( and therefore it's owners) of merging with Milklink, which was equivalent to around 2 years of 13th payments for Milklink members to fund the loan payout to Milklink members and the pension fund deficit. But that doesn't change the current situation or the future.

  22. #22

    Re: Arla

    I have no doubt that there is/was cost involved but if milk link had not "merged" with amba then I have no doubt that they would have to have paid more for there milk as I am sure the large amount that milk link supplied to arla uk would have gone up in price and they would have been unable to divert milk into liquid to fill there hole . they must be making more on the cheese as well because that milk has been supplied cheaper as well than milk link days(when compared to other cheese makers in the league tables)they have won all ways in the uk it is not our fault that there plants outside of the uk don't seem to be performing.we should not be receiving less as owners than others. THEY NEED TO SORT THIS OUT BEFORE WE START TO as they will end up the losers then, no milk no margin !!!! how do they fill there contracts when we have gonethey are desperate for milk look at the constant recruitment campaign ,look at how many staff they have allocated to this recently.i believe that they are looking to recruit 500million litres they are not doing that unless it is hugely profitable

  23. #23
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    Re: Arla

    It makes me wonder if they want us as owners, cos lets face it they are screwing us on price and offering directs more. If you look at it from their point of view if we all left they would get our factories(which is what we've worked for all these years) and they wouldn't need to make a 13th payment to us. They could get all their milk supplied on direct contracts and not have the hassle of members and if they use directs they can drop and pick up at the drop of a hat. So if we all leave they get our factories and if we stay they screw us on price. They take all their profits from the uk dairy industry back to scandinavia same as muller and Germany. What ever way I look at it at the moment they have us by the b*#*s and we are jiggered. FOB its time they showed us some commitment and layed their cards on the table.

  24. #24
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    Re: Arla

    An article about Arla here: Arla sees higher turnover and profit in 2012, Farmers Weekly.

  25. #25

    Re: Arla

    thanks for that link malcolm ,were you involved with dfob by any chance??

  26. #26
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    Re: Arla

    So the market in Europe is not lifting as hoped. But Arla have increased turnover by 15% and profits by 36%! Yet they are still screwing us!! Come on FOB its time for some serious questions to be asked next week. If something doesn't happen soon members will leave in their 100s. I don't think they realise how angry and cheated we feel!

  27. #27

    Re: Arla

    Quote Originally Posted by kernowstar View Post
    So the market in Europe is not lifting as hoped. But Arla have increased turnover by 15% and profits by 36%! Yet they are still screwing us!! Come on FOB its time for some serious questions to be asked next week. If something doesn't happen soon members will leave in their 100s. I don't think they realise how angry and cheated we feel!
    Arla increased turnover mainly by mergers etc, I would expect turnover per litre is probably lower than previous year. Profit gets divided to members or used for capital investment. They will have needed extra capital to pay for the Milklink merger (money to milklink members and pension issues etc) amongst other things. In a co-op profit is just what you decide/need not to pay out monthly and what is then either used to reinvest or as a 13th payment.

    we have made it very clear at UK shareholder meetings (staff present include the head of owner services for the whole of arla, who reports directly to the chief exec) plus our board directors have made the situation very clear in board meetings. In addition UK staff such as Ash Amiramadi will also be reporting back. All of us who are council members, representatives or board members are also farmers, we talk to many members regularly and we make sure members views ( which are often our own views/concerns) are passed on.

  28. #28

    Re: Arla

    *******s
    read your owner update !!!!! from arla Profit is 3%of net revenue no debating that is the policy members price will be altered to achieve that.the 13 payment is what is left after consolidation .i strongly suspect that arla paid out to much in the 1st half of the year and made up for it by raining in the price in the second half which has impacted on our return more than it has them.

  29. #29

    Re: Arla

    Quote Originally Posted by fir tree View Post
    *******s
    read your owner update !!!!! from arla Profit is 3%of net revenue no debating that is the policy members price will be altered to achieve that.the 13 payment is what is left after consolidation .i strongly suspect that arla paid out to much in the 1st half of the year and made up for it by raining in the price in the second half which has impacted on our return more than it has them.
    yes, I should have added to my point about the profit in a co-op being what is needed/decided that in Arla it has been decided that it will be 3%. The consolidation is the part used to pay for capital investment and that is 4.5% of total price paid out.
    As for your second statement that is correct, I know that, since I asked that question to the CEO at the last BoR meeting, which was reported in the owner update. But obviously it impacted on us all the same, as we are all getting the same price (except 13th payment ,in case someone states the obvious.

  30. #30
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    Re: Arla

    Just wondering when will the milk link members start getting the 13th payment, and typically how much is this as a ppl, or will it vary a lot year on year,

    QUOTE=Farmer on a bike;3406]yes, I should have added to my point about the profit in a co-op being what is needed/decided that in Arla it has been decided that it will be 3%. The consolidation is the part used to pay for capital investment and that is 4.5% of total price paid out.
    As for your second statement that is correct, I know that, since I asked that question to the CEO at the last BoR meeting, which was reported in the owner update. But obviously it impacted on us all the same, as we are all getting the same price (except 13th payment ,in case someone states the obvious.[/QUOTE]

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