The group reported a rise in sales by value in the first half of 2023 due to higher prices as its cost rose. However, it said volumes of Lurpak butter, a premium brand which is sold in 95 countries around the world, fell 6.6%, while the amount of Castello cheese it sold decreased by 4.4% from a year earlier.
Arla's earnings before interest and tax for the first half fell 36% from a year earlier to €161 million ($174.19 million).
"During the first half of 2023, we continued to see inflationary pressure resulting in consumers moving towards discount channels and private-label products," Arla chief financial officer Torben Dahl Nyholm said in a statement.
The group lowered its sales outlook for 2023 to between €13.2 billion and €13.7 billion, from €13.6 billion to €14.2 billion seen in February, because of the continued uncertainty in the market.
Owned by some 8,400 dairy farmers in Denmark, Sweden, Germany, Britain, Luxembourg, the Netherlands and Belgium, Arla said revenue totalled €7.06 billion for January to June, up 10.7% from the same period last year.
Revenue growth of some €700 million was primarily driven by price increases, the dairy cooperative said.
The company's branded volume growth saw a 6.0% decline in the first half, with declines of 5.7% in Europe and 4% in international markets.
"As anticipated, the market conditions put our branded products under pressure. However, we managed to protect our relative market shares against our competitors, and I am pleased that we were able to secure group earnings, a competitive milk price and a half-year supplementary payment to our farmer owners of 1.0 euro-cent/kg milk based on the half-year volumes as planned," said Arla Foods CEO, Peder Tuborgh.
Article by Reuters, additional reporting by ESM