Norwegian dairy cooperative Tine is restructuring six of its domestic facilities due to a decline in milk consumption. The impacted sites include dairy plants in Sem, Kristiansand, Sola, Frya, Lom, and Skjåk.
The restructuring will result in approximately 100 full-time positions being cut, affecting around 250 employees. Tine stated that some employees will be offered roles at other plants.
As part of the restructuring, Tine plans to close its dairy facilities in Sem and Kristiansand by the end of 2025. The milk and cream bottling lines at Sola and Frya will also be discontinued, with Sola being repurposed for storage and Frya focusing on yogurt, crème fraiche, and cottage cheese production.
Operations at the Lom and Skjåk plants, which produce brown cheese, will continue on a smaller scale due to decreasing demand for the product in Norway.
Tine reported a 30% decrease in brown cheese consumption per person in Norway compared to 15 years ago. Despite this, the company plans to invest in a new pot-boiled brown cheese product based on a traditional recipe from the Gudbrandsalen Valley.
Some production lines at Lom and Skjåk will be relocated to Byrkjelo or Storsteinnes, resulting in job losses. The impact on employment at each site is currently unknown.
Tine’s logistics center will continue normal product distribution. The restructuring is a response to the ongoing decline in milk consumption in Norway, which has created excess capacity at Tine’s plants.
Sales of Tine’s unflavored milk products have decreased by 40% in the past decade, primarily due to increasing imports and heightened market competition in Norway.
Tine aims to work with affected employees to find suitable future solutions, whether within or outside the company, in collaboration with union representatives.
The group board stated that the restructuring decisions were made to enhance competitiveness and prepare the company for the future. Tine expects annual savings of approximately Nkr100m ($9m) starting from 2026 as a result of the changes.
This announcement follows Tine’s previous company-wide restructuring in November, which included the closure of its Ålesund dairy plant and job cuts.
Tine’s revenue in 2022 reached Nkr24.9bn, a 3.4% increase compared to 2021, with 81% of net income coming from the Norwegian market. The cooperative has 8,291 owners and processes milk from around 7,000 farms.
The content of this announcement reflects the need for Tine to adapt its production structure to the changing market conditions in order to maintain cost efficiency and secure Norwegian milk production throughout the country.