Arla Foods Annual Report 2020
Management Review
Our Strategy Our Brands and Commercial Segments Our Responsibility Our Governance
Our Performance Review Our Consolidated Financial Statements
Our Consolidated Environmental, Social and Governance Data
DEALING WITH BREXIT
Since the Brexit vote in 2016, Arla has advocated for a trade deal which supports tariff-free trade in dairy, and we welcome
that the UK government and the EU finally came to an agreement at the very end of 2020. However, whereas zero tariffs
and quotas are good news, the non-tariff barriers within the deal will create friction resulting in additional complexity and
cost. Having prepared for this scenario for four and a half years, we have plans in place to mitigate these impacts in close
collaboration with our customers and suppliers, and we face the challenges posed by Brexit from a position of strength
with a fundamentally resilient and agile UK business.
Our UK business
Our UK business currently accounts for 26 per
cent of our revenue and is one of the drivers of our
branded growth. Hence, it is very important for Arla
that our products and employees can move freely
from and to the UK. Some of the successful brands
in the UK market, including LurpakⓇ, Arla® Skyr and
Lactofree, are imported to the UK, while some
CastelloⓇ products are exported from the UK.
Brexit impacts in 2020
In 2020, the uncertainties caused by Brexit were
offset by Covid-19, which caused solid branded
growth in the UK due to increased lunching and
cooking at home. The UK business proved its
resilience during the pandemic and is operationally
ready to deal with the volatility caused by Brexit.
Expected future impacts and
mitigation plans
With a trade deal, Arla's UK business is much
stronger than with no deal. However, as the UK
has left the EU Single Market and Customs Union
there will be additional administration, form filling
and controls of the products we import and export,
and possible delays at ports and borders may
cause significant disruption. We have plans in place
to deal with this, and we are in continuous dialogue
with our customers and suppliers about further
mitigation measures.
Our Brexit Task Force will continue to coordinate
our response as we navigate the unfolding of the
new EU/UK trading relationship. We will also be
monitoring the UK and EU dairy markets and
currency situation carefully and be ready to
respond as necessary.
As seen during Covid-19, our organisation is set up
to be agile and deal with uncertainty, and we will
use our resilience and agility also to face the
challenges posed by Brexit.
ARLA IN THE UK
Revenue, EURb
2.7
Total assets, EURM
958
Share of the inflow of raw milk from owners
26%
Number of farmers in the UK
2,241
Number of employees in the UK
3,362 ¹)
Number of production and packaging facilities
10
20 ARLA FOODS ANNUAL REPORT 2020
Key brands
LurpakⓇ, Arla® Skyr and Lactofree, CastelloⓇ
1) Full-Time Equivalents (FTE)View entire presentation