Lactalis Faces Tax Fraud Investigation

Police Raid on French Dairy Giant

French authorities conducted a search of Lactalis, a leading dairy company, on Tuesday, amidst allegations of tax fraud. The operation, led by the French National Fiscal Offenses Repression Brigade (BNRDF), targeted the company’s headquarters in Laval and other locations. This move is part of a broader investigation by the French National Prosecutor’s Office into claims that Lactalis has been evading taxes by shifting profits to subsidiaries in Belgium and Luxembourg.

The Allegations Unfold

Reports from Le Monde highlight that the investigation centers on accusations of Lactalis transferring profits to minimize its tax liabilities in France. The period under scrutiny spans from 2009 to 2020, with the alleged tax evasion amounting to several hundred million euros. The probe was initiated following a series of reports and complaints, including a significant report from the farm union Confederation Paysanne in 2019 and tax denunciations in 2022.

Lactalis Responds

Lactalis has acknowledged the searches, stating they pertain to “old events already reviewed by authorities”. The company emphasized that the operations were conducted smoothly and are part of an ongoing inquiry into allegations from years past. Despite the legal challenges, Lactalis, a privately-owned entity claiming the title of the world’s largest dairy business, reported revenues of €28.3 billion in 2022.

Investigation Background

The inquiry into Lactalis’s financial activities began in 2018 with suspicions of laundering charges related to aggravated tax fraud. It expanded to include aggravated tax fraud after receiving additional reports and tax denunciations. The investigation aims to determine the extent of the alleged fraud and the precise amount of duties evaded.

Broader Context

The searches at Lactalis’s premises come at a time of heightened social tensions in France, marked by protests from the farming community demanding fair prices and reduced bureaucracy. However, authorities have clarified that the timing of the raids is unrelated to these protests, being part of a long-planned operation. The case against Lactalis highlights ongoing concerns over corporate tax practices and their impact on national economies.

Read: Top Dairy Producers In The World

Posted on Categories Dairy

Arla Foods Eyes Acquisition of Hero Group’s Semper Facility in Sweden

Strategic Expansion in Dairy Sector

Arla Foods, a leading dairy company, is currently in negotiations to acquire the Semper facility in Götene, Sweden, owned by Switzerland’s Hero Group. This move comes as part of Arla’s expansion strategy in the dairy sector. The potential acquisition includes the factory buildings, equipment, and land.

Longstanding Neighbors Poised for Business Merger

Synergistic Relationship in Götene

Having shared neighboring facilities in Götene for many years, Arla and Semper, a subsidiary of Hero Group, demonstrate a synergistic relationship. Arla operates a cheese and spreadable butter factory adjacent to Semper’s site, showcasing a history of cooperation and shared resources.

Hero Group’s Market Shift Leads to Asset Sale

Changing Consumer Demands Impact Business Strategy

Hero Group’s decision to sell its Semper facility follows a shift in market conditions. Factors such as declining baby milk consumption, reduced demand from China, and a falling birth rate have led to a decrease in demand for baby and toddler milk. Consequently, Hero Group is refocusing its strategic priorities, moving away from baby milk, gluten-free products, and B2B production.

Arla’s Strategic Interest in Semper’s Assets

Expanding Powdered Milk Production

Arla’s interest in acquiring Semper’s assets aligns with its goal to expand its powdered milk production capabilities. Marika Lifbom, the manager of Arla’s dairy in Götene, highlighted the opportunity to utilize the equipment for milk powder production for industrial markets. This acquisition would complement Arla’s existing powdered milk facilities in Sweden and support its exports to the Middle East and China.

Potential Impact on Local Employment

Union Negotiations Underway Amidst Changes

The proposed acquisition has implications for local employment, with negotiations involving union officials already underway. The Semper facility in Götene currently employs 190 people, while Hero’s broader Semper business across Denmark, Norway, Finland, and Sweden has a workforce of 300. The outcome of these negotiations will be pivotal for the employees of both Arla and Semper.

A Win-Win Opportunity for Arla and Hero Group

Enhancing Production Capacity and Efficiency

The acquisition would enable Arla to enhance its production capacity and efficiency, particularly in the powdered milk sector. With an abundance of milk supply in Sweden and other European countries, Arla sees this as an ideal opportunity to bolster its production capabilities and meet the growing demand for powdered milk products globally.

Related: Top Dairy Producers In The World

Posted on Categories Dairy

Danone’s €100 Investment in Mexico

Danone’s Commitment to Mexico: A 100 Million-Euro Investment

Danone, renowned for its Danonino and Bonafont brands, has declared a significant investment in Mexico. The multinational food-products corporation is set to invest 100 million euros in 2024, marking a substantial financial commitment to the country. This announcement was made by Emilio Aguilar, Danone’s Vice President of Public Affairs, during a recent press conference.

Investment Aims: Innovation and Production Enhancement

Aguilar emphasized that the investment aligns with Danone’s previous financial inputs and is intended to support the maintenance of production lines and foster innovation within the country. He articulated the company’s vision, stating, “To grow our legacy we are going to continue innovating, continue growing, and continue investing in our business.” This statement underscores Danone’s long-term strategy in Mexico.

Celebrating 50 Years in Mexico with New Initiatives

The investment announcement coincides with Danone’s 50th anniversary in Mexico. Recently, the company ventured into the plant milk market with their new product, Bye Bye Muu. Additionally, they introduced an eco-friendly initiative with a label-free bottle made of recycled materials for Bonafont, their bottled water brand. However, specific plans for new product launches in Mexico this year remain undisclosed.

Recorded Growth and Post-Pandemic Strategy

In 2023, Danone experienced sustained growth, though exact sales figures were not revealed. The company benefited from the resumption of in-person schooling and office work. Post-pandemic consumer trends have led Danone to pivot back to on-the-go product formats, catering to increased demand as people return to schools and workplaces.

Navigating Challenges in an Election Year

Looking forward, Danone anticipates a challenging yet growth-oriented year, especially considering the upcoming elections. Aguilar conveyed a resilient outlook, remarking, “What we have learned in general in industries is that, with elections or without elections, we work and we evolve.” He stressed the importance of overcoming electoral challenges and remaining focused on production, employment generation, and ensuring product availability for consumers.

Related: Top Dairy Producers In The World

FrieslandCampina Key Nutrition Trends for 2024:

Sustainable Future in Focus: FrieslandCampina Ingredients, renowned for its protein and prebiotic solutions, in their recently released Nutritional Trends 2024 report, spotlights five pivotal trends expected to shape the food, drink, and supplement industries in 2024. Amid a complex global environment, consumers are increasingly seeking comfort and control through nutrition, presenting unique opportunities for brands to foster healthier choices.

One of the foremost trends, Securing the Future, Sustainably, highlights the growing consumer demand for sustainable products. Although more individuals are adjusting their diets for environmental reasons, skepticism about the authenticity of environmental claims persists. Manufacturers are thus urged to back their sustainability assertions with solid, verifiable data to ensure lasting success.

Related: Top 10 Largest Dairy Producers in USA by Market Share & Volume

Tailoring Nutrition to Individual Needs: Another significant trend, Nutrition for All, points to the increasing awareness among consumers about their distinct nutritional requirements influenced by factors such as age, gender, genetics, and lifestyle. This awareness opens substantial opportunities for brands to create customized nutritional solutions catering to specific, and currently unaddressed, consumer needs.

Rise of Plant-Based Alternatives: The trend Alt Proteins Go Global reflects the mainstream acceptance of plant-based alternatives. As consumers, especially those following flexitarian diets, integrate more meat and dairy substitutes into their meals, the emphasis on innovation in plant-based products grows. These innovations should aim to match the taste and nutritional value of traditional products. The potential of alternative proteins, like those derived from precision fermentation, is also noteworthy, albeit needing myth dispelling and consumer education.

Holistic Gut Health Approach: The report also identifies the trend of Going Beyond via the Gut, acknowledging the connection between physical and mental health. Consumers are increasingly looking towards gut health solutions for overall well-being. Brands are encouraged to take a holistic approach to gut health, considering its impact on immunity, brain function, and muscle health.

Supporting Healthy Ageing and Recovery: The final trend, Ageing and Recovering Well, focuses on the older population’s proactive approach to health, emphasizing healthy ageing and maintaining an active lifestyle. Innovations in medical nutrition, incorporating muscle-boosting ingredients, are key to supporting recovery and overall well-being in this demographic.

Vicky Davies, Global Marketing Director at FrieslandCampina, underscores the importance of providing consumers with necessary nutrition amidst uncertainties. These trends demonstrate a growing consumer emphasis on managing nutrition as a controllable aspect of their lives, with a keen focus on environmental impact, sleep quality, and personal fitness goals.

Danone’s Russian Political Maze

Explore Danone’s challenging journey in Russia amid unexpected management changes and complex negotiations, revealing the intricacies of corporate resilience.

Danone in Russia: Navigating a Corporate Maze Amidst Political Tensions

The Danone Dilemma in Russia: A Tale of Unexpected Management and Unsettled Deals

This summer, a group of Chechens linked to Ramzan Kadyrov, their regional leader, unexpectedly took control of Danone’s operations in Russia. This move occurred while Danone, a French dairy giant, was finalizing a deal to exit Russia. The Kremlin’s decision to place Danone and Danish brewer Carlsberg under “temporary external management” disrupted these plans, especially affecting Carlsberg, whose former executives are now imprisoned. However, Danone’s situation has evolved into a peculiar stalemate, with much of the company’s daily management remaining unchanged under the new Chechen leadership.

Business as Usual? Inside Danone’s Russian Operations Post-Takeover

While the Chechen takeover seemed alarming, the operations at Danone’s Russian dairy factories have continued with minimal disruptions. The new Chechen managers, surprisingly professional in their approach, have avoided aggressive tactics, maintaining a low profile. The situation, described as “extremely amicable,” has not provoked public complaints of mistreatment from Danone. Despite these developments, the company is still working to finalize the sale of its Russian business, seeking a Kremlin-approved buyer.

Impact and Response: Danone and Carlsberg’s Different Paths in Russia

Russia’s abrupt management changes in foreign companies, like Danone and Carlsberg, have created shockwaves. Danone, representing about 5% of the group’s annual revenue, is significantly impacted by these developments. Initially committing to stay in Russia post-invasion of Ukraine, citing responsibility towards employees and suppliers, Danone later shifted its stance, planning an exit that could lead to substantial financial losses. Meanwhile, Carlsberg’s situation contrasts sharply, with arrests and allegations of targeting innocent employees by the Russian government.

Navigating Uncertainty: The Road Ahead for Danone in Russia

Despite the takeover, Danone’s executive committee in Russia remains active, working towards asset protection and a potential sale. The company, while preparing to protect its shareholder rights, has stopped short of directly accusing Russia of expropriation. Interestingly, while Yakub Zakriev, Kadyrov’s nephew, is officially the general director of the renamed “Life & Nutrition,” Dutch Danone veteran Charlie Cappetti continues to play a significant role unofficially.

The Complexity of Yogurt Production: Danone’s Leverage in Russia

Danone’s expertise in yogurt production, involving complex supply chains and unique ingredients, offers it some leverage over the new management. This complexity ensures that the company’s unique production processes remain vital, posing challenges for any drastic changes by the new managers.

Conclusion: A Tense Balancing Act in Corporate Russia

Danone’s situation in Russia highlights the challenges faced by foreign investors in navigating uncertain political and economic environments. The company’s cautious approach and ongoing negotiations reflect the complexities of maintaining business operations while adhering to corporate responsibilities and navigating geopolitical tensions.

Related: Top Dairy Producers In The World

Posted on Categories Dairy

FrieslandCampina Cuts 1,800 Jobs for Profitability

FrieslandCampina, a prominent Dutch dairy cooperative, has unveiled a comprehensive cost-saving strategy that includes cutting 1,800 jobs across its global operations over the next two years. This strategic move, geared towards improving profitability, is projected to yield savings of up to €200 million ($215 million) and forms a pivotal component of the company’s ambitious plan to slash annual expenses by €400 million to €500 million by 2026.

Global Dairy Powerhouse

With a formidable presence in more than 100 countries, FrieslandCampina ranks as one of the world’s leading dairy cooperatives. Its product portfolio spans a wide spectrum, encompassing dairy staples such as milk and cheese, as well as vital components for the food and pharmaceutical sectors. The cooperative’s workforce currently spans 30 countries and comprises roughly 22,000 employees, underscoring its global significance.

Streamlining Operations for Efficiency

The decision to cut 1,800 jobs underscores FrieslandCampina’s commitment to operational efficiency and cost control. This ambitious workforce reduction initiative will require careful planning and execution to ensure that the company continues to meet the demands of its diverse international customer base while remaining competitive in an ever-evolving industry.

Related: Top Dairy Producers In The World

Financial Performance

In its financial report for 2022, FrieslandCampina reported a substantial turnover of €14 billion, a testament to its market dominance. Nonetheless, the dairy industry is not without its challenges, including fluctuating milk prices, shifting consumer preferences, and mounting environmental concerns. In response, FrieslandCampina is proactively adapting its operations to navigate these challenges while sustaining profitability. FrieslandCampina plans to cut 1,800 jobs worldwide in 2 years, aiming for €200 million savings to boost profitability and reduce annual costs by up to €500 million by 2026.

Navigating Industry Challenges

This strategic workforce reduction by FrieslandCampina reflects a proactive response to the multifaceted challenges confronting the dairy industry. By focusing on cost efficiency and profitability, the cooperative aims to maintain its position as a competitive and sustainable player in the global dairy market.

As FrieslandCampina embarks on this transformative journey, its actions are poised to shape not only its future but also the broader landscape of the dairy industry. Stakeholders, employees, competitors, and industry observers will closely monitor the cooperative’s progress as it strives to adapt to changing market dynamics while ensuring long-term sustainability.

Related: Fonterra’s Huge Profit Jump as Milk Prices Surge!

Source: Amsterdam, December 12, 2023 (Reuters)

Posted on Categories Dairy

Top Dairy Producers In The World

Explore the top dairy producers of 2023 in this comprehensive report, featuring a detailed analysis of leading dairy-producing countries and companies. Gain insights into the global dairy industry with key data on production volumes and revenue, highlighting major players like Nestlé, Lactalis, and Dairy Farmers of America. Essential reading for industry professionals and those interested in global dairy market dynamics.

As of 2023, the top dairy producers in the world can be categorized into two main groups: countries and companies.

Top Dairy Producing Countries

  1. European Union
  2. United States
  3. India
  4. China
  5. Brazil

These rankings are based on the overall production of cow milk.

Top Dairy Companies by Revenue

  1. Nestlé (Switzerland)
  2. Lactalis (France)
  3. Dairy Farmers of America (United States)
  4. Danone (France)
  5. Yili Group (China)
  6. Fonterra (New Zealand)
  7. FrieslandCampina (Netherlands)
  8. Mengniu Dairy (China)
  9. Arla Foods (Denmark)
  10. Saputo Inc. (Canada)

Dairy production is crucial globally, providing essential nutrition, economic livelihoods, cultural value, and contributing to food security. Despite sustainability challenges, it remains a key sector, driven by continuous innovation and research.

Related: Top 10 Largest Dairy Producers in USA by Market Share & Volume

Dairy Farming

Top 10 Largest Dairy Producers in USA by Market Share & Volume

Overview of the U.S. Dairy Industry

The U.S. dairy industry is a critical sector in American agriculture. It includes the production, processing, and distribution of milk and milk products. The industry is known for its complexity, with a wide range of products from fluid milk to cheese, yogurt, and butter.

Criteria for Ranking

The top dairy producers are typically ranked based on various criteria, including:

  1. Milk Production Volume: The total volume of milk produced is a primary factor.
  2. Revenue: Financial performance can also be a key indicator.
  3. Market Share: The percentage of the market controlled by a producer.
  4. Geographical Spread: The extent of operations across different regions.
  5. Product Diversity: The range of dairy products offered.

Top 10 Dairy Producers in the USA (as of early 2023)

  1. Dairy Farmers of America (DFA)
    • Largest dairy cooperative in the USA.
    • Wide range of products including fluid milk, cheese, and dairy ingredients.
  2. Dean Foods
    • One of the nation’s leading fluid milk processors.
    • Brands include DairyPure, TruMoo, and Friendly’s.
  3. Land O’Lakes
    • Known for butter and cheese products.
    • Also a large cooperative with a strong presence in the Midwest.
  4. California Dairies, Inc.
    • Largest dairy cooperative in California.
    • Specializes in butter, fluid milk, and milk powder.
  5. Saputo Inc.
    • A global dairy company with significant operations in the USA.
    • Products include cheese, fluid milk, and specialty dairy items.
  6. Agropur
    • Canadian cooperative with substantial operations in the USA.
    • Known for cheese and other dairy products.
  7. Schreiber Foods
    • Private company specializing in yogurt, cheese, and other dairy products.
    • Supplies many food service and retail businesses.
  8. Great Lakes Cheese
    • Major producer of cheese and dairy products.
    • Supplies to retail and food service sectors.
  9. Kraft Heinz
    • Known for cheese products and other food items.
    • A major player in the dairy segment with brands like Philadelphia Cream Cheese.
  10. Leprino Foods
  • World’s largest producer of mozzarella cheese.
  • Supplies cheese to many pizza chains and foodservice providers.

Notes and Considerations

  • Market Dynamics: The dairy industry is subject to fluctuations due to factors like global demand, milk supply, and changes in consumer preferences.
  • Sustainability and Innovation: Many producers are focusing on sustainability and innovative practices to meet changing market demands and environmental concerns.
  • Recent Mergers and Acquisitions: The rankings can change due to mergers, acquisitions, and business restructurings.

Sources for Further Information

  • Industry Reports: Reports from USDA, FAO, and dairy industry associations.
  • Financial News: Bloomberg, Reuters, and industry-specific news sources.
  • Company Reports: Annual reports and press releases from the companies themselves.

Related: The Top 8 Dairy Companies


Additional content: 16 Biggest Milk Companies in the US

The Top 8 Dairy Companies

The dairy industry plays a vital role in providing essential nutrients to people all over the world. With advancements in technology and a growing global population, the demand for milk and milk products has been on the rise.

The global dairy industry is valued at around $600 billion, with a projected growth rate of 2.5% annually. The industry includes milk production, processing, and distribution of various dairy products such as milk, cheese, yogurt, butter, and ice cream. The industry is highly concentrated, with a few major players dominating the market.

Factors that drive the growth of the industry include population growth, urbanization, and changing consumer preferences towards dairy-based products. However, the industry faces challenges such as fluctuating milk prices, changing consumer preferences towards plant-based alternatives, and increased competition from non-dairy products.

The largest dairy companies around the world:

  1. Fonterra Co-operative Group Ltd. – Headquartered in New Zealand, Fonterra is the world’s largest exporter of dairy products and one of the largest dairy companies globally, with revenue of $16.6 billion in 2020.
  2. Dairy Farmers of America (DFA) – Based in the United States, DFA is a milk marketing cooperative that supplies milk to major dairy processors and brands. It had a revenue of $14.6 billion in 2020.
  3. Lactalis Group – A French dairy company, Lactalis is one of the largest dairy companies in the world, with a revenue of $15.8 billion in 2020. The company produces a wide range of dairy products including milk, cheese, and yogurt.
  4. Arla Foods – Headquartered in Denmark, Arla Foods is a cooperative owned by dairy farmers in Sweden, Denmark, the UK, Germany, Belgium, Luxembourg, and the Netherlands. The company generated revenue of $13.2 billion in 2020.
  5. Saputo Inc. – A Canadian dairy company, Saputo is one of the largest dairy processors in the world, with a revenue of $9.4 billion in 2020. The company produces a wide range of dairy products including milk, cheese, and butter.
  6. FrieslandCampina – A Dutch dairy company, FrieslandCampina is one of the largest dairy cooperatives in the world, with a revenue of $9.3 billion in 2020. The company produces a wide range of dairy products including milk, cheese, and yogurt.
  7. Nestlé S.A. – A Swiss multinational food and drink processing conglomerate, Nestle is one of the largest dairy companies in the world, with a revenue of $91.4 billion in 2020. The company produces a wide range of dairy products including milk, cheese, and yogurt.
  8. Danone – A French multinational food-products corporation, Danone is one of the largest dairy companies in the world, with a revenue of $27.5 billion in 2020. The company produces a wide range.

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