February 21, 2018 / 8:05 AM / a year ago

Denmark's Arla gets sales boost from higher dairy prices

COPENHAGEN, Feb 21 (Reuters) - Arla Foods, one of the world’s biggest dairy companies, said higher milk prices lifted sales last year, enabling the co-operative to increase payments to its farmer-owners.

Arla, headquartered in Denmark, said it delivered a 27.4 percent increase in the pre-paid milk price to its owners last year.

“We delivered a strong performance built on the good balance of brands, categories, and geographies,” said Chief Executive Peder Tuborgh.

“Most importantly, this enabled us to pay out significantly higher milk prices to our farmer owners.”

Last year was a volatile one for global milk prices characterised by significant shifts in market prices, which supported an increase in sales prices of 1 billion euros ($1.23 billion), it said.

The GlobalDairyTrade (GDT) benchmark milk index showed prices are up around 65 percent since February last year.

This year’s sales are expected to be in the range of 10-10.5 billion euros compared with the 10.3 billion euros achieved in 2017 - an 8 percent increase from 2016.

Last month, Arla said it aims to increase its investments this year by almost 60 percent to meet growing global demand for dairy products and consumers’ shift to healthier options.

The firm - owned by 11,200 farmers in Denmark, Sweden, Germany, Britain, Luxembourg, the Netherlands and Belgium -is competing with food giants such as Danone and Nestle . ($1 = 0.8118 euros) (Reporting by Stine Jacobsen, editing by Louise Heavens)

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