Arla Foods is looking to sell its cheese-making facility in the UK. The dairy giant has put its Melton Mowbray creamery, also known as Tuxford and Tebbutt, on the market. The plant, located in Leicestershire in England’s East Midlands, currently employs around 60 people.
As the speciality cheese market in the UK, including Stilton, has experienced a decline in recent years, Arla is reviewing what this means for its business. “Over the last few years, the speciality cheese market in the UK, which includes Stilton, has continued to decline. As a farmer-owned cooperative, we are therefore looking at what this means for our business so we can continue to return a fair price back to our 2,000 UK farmer-owners,” said Fran Ball, VP of production in the UK at Arla.
The Melton Mowbray site is one of six creameries in the world permitted to make Blue Stilton, according to Arla. The company has assured that the facility will continue to operate during the review, with no impact on production, customers, or employees. An update on the review is expected to be provided by April.
Furthermore, Arla expects to provide an update on the review by April. “The Melton Mowbray site will continue to be operational during [the review], and there will be no impact to production, customers, or employees,” said Arla.
Arla’s decision comes amid financial growth challenges. The company reported an 18.3% rise in revenue to €2.99bn ($3.26bn) in 2022, driven by price increases. However, volumes from Arla’s branded business in the UK fell 7.3% in the same year due to the impact of inflation on shopper behavior.
Earlier this month, the group announced its plan to increase production capacity at a Finnish dairy site after acquiring the building entirely. Arla increased its shareholding in Massby Facility and Service, a property management company servicing a dairy in Sipoo, near Helsinki, from 60% to 100%.
The UK represents Arla’s largest market in terms of annual revenue. The company has eight dairy sites in the UK, and Taw Valley Creamery, Trevarrian, and Stourton Creamery are among them.
Despite the diverse network of dairy sites, Arla’s decision to pursue a sale of the Melton Mowbray creamery aims to streamline its operations and address the challenges facing the speciality cheese market in the UK.
Arla’s effort to adapt to market dynamics will be crucial in maintaining its position as a leader in the food and beverage industry. “Arla Foods, we are proud of the heritage that we have from our creameries across the UK. We are privileged to employ some of the finest cheese makers in the country, which includes those at our Arla Melton Mowbray Creamery UK,” said Ball.
There is potential for growth and opportunity in this changing landscape as Arla repositions its business operations. By being proactive and responsive to these industry-wide shifts, Arla is positioned to fuel continued success in the global food and drink sector.
