Press release

Arla Foods announces further milk price increase

Arla Foods UK plc has announced a further rise in the milk price paid to members of its dedicated milk supply group, Arla Foods Milk Partnership (AFMP). From 1 June 2007 the AFMP standard litre price will increase by 0.4p per litre to 19.8ppl.

Arla Foods Group Director of Milk Procurement, Peter Walker, said that the increase followed a wide-ranging review across key elements of the company's pricing arrangements: "Commodity returns have continued to strengthen and, although we came into the current half year with a deficit, the improved butter and powder prices mean that the deficit will have been cleared by the end of May" said Mr Walker.

"From 1 June 2007 our milk price will be at the top end of industry returns. In addition, as a result of our relationship with Asda and Tesco, from August around 60 per cent of our members will receive a significant further premium over the Arla base price."

Jonathan Ovens, AFMP Chairman comments: "The Partnership is in a strong position and, working closely with the Arla Foods UK team, following the acquisition by Arla amba, we can expect to benefit from further opportunities that will arise in the future.

"I am encouraged by the progress made with the on-farm cost recovery, where Arla achieved a significantly greater increase than all other processors. We will continue to look for further opportunities to improve the position for all of our members."

Arla Foods UK plc is home to some of the UK’s leading dairy brands including Cravendale, Lurpak and Anchor. Processing approximately two billion litres of milk a year Arla continues to be one of the UK’s leading dairy companies and a supplier of fresh liquid milk and cream to the top seven retailers.

Over 2,500 daily deliveries are made directly to stores nationwide and Arla brands can be found across the dairy category. As well as the leader of the butter, spreads and margarine sector, and a major supplier of other added value products including flavoured milk and cheese, Arla continues to build working relationships with Arla Foods Milk Partnership, a unique group of dairy farmers, which supplies around 90 per cent of Arla's total milk requirements.

Behind this leading business is a team of circa 2,800 people across the UK located at our dairies, distribution centres and head office.

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