Arla Foods to sell Sonthofen dairy site
Arla Foods has announced that it plans to sell its cheese production site in Sonthofen, Germany to German-based dairy company Allgäuer Hof-Milch GmbH.
Both companies have signed a letter of intent and aim to finalise the transaction before 1 May 2018.
Arla Foods has decided to take this step because the production and distribution of the speciality cheese produced in Sonthofen no longer corresponds with the strategic orientation of Arla’s businesses in Germany and Europe.
Peter Giørtz-Carlsen, Arla Foods’ head of Europe, executive vice president, says, “All of our production sites in Germany are focused on supplying both the German market and our export markets, playing a crucial role in our delivery of the Arla Group strategy, Good Growth 2020.
“However, since the site in Sonthofen no longer corresponds with our overall strategic aim, we are pleased to have found a suitable buyer to continue its production and legacy.” There are currently 84 people employed in total at the site. The 61 employees from production and the associated dairy shops will continue to be employed by Allgäuer Hof-Milch as part of the transfer.
Arla Foods has also stated that it will find a solution for all the 23 administrative employees at the Arla site in Sonthofen, most of whom will receive job offerings either through continued employment at Allgäuer Hof-Milch or through redeployment within Arla in Germany.
It is planned that the milk for the production will, initially, continue to be supplied by Arla Foods, whose milk supply contracts with farmers from the Allgäu region in most cases are still valid until the end of 2019.
In addition, it is planned that Allgäuer Hof-Milch will continue to produce cheese products for Arla until further notice, so that Arla can comply with the current contracts with its retail customers.
The second Arla site in the Allgäu region in Bad Wörishofen, Germany is not affected by this planned transaction. Arla is currently examining various strategic options for this site, as the company already announced in November 2017.