After careful consideration, Arla Foods announced plans to discontinue operations Feb. 29, 2016 at its Kißlegg-Zaisenhofen, Germany, dairy site.The decision comes in response to a massive fall in prices and strong pressure from competition in international markets. The closure will affect 38 employees.
“This was not an easy decision to take,” says Winfried Meier, senior vice president of Arla Foods Central Europe. “In recent months, our experts have carefully examined and worked through a variety of options. Unfortunately, it became clear that continued operation of the Kißlegg site was not economically viable.”
As a cooperative, Arla’s main aim must be to continue to pay a competitive milk price both to its farmer-owners and to suppliers in the Allgäu area. However, this can only be achieved if Arla makes its business in the Allgäu area more profitable in the long term.
The background for the closure is a fall in demand for the hard cheese called “MonRocco,” produced in Kißlegg.
“Over the past three years, competition has intensified dramatically. In Eastern Europe in particular, ‘MonRocco’ can be produced more cheaply than is possible at the Kißlegg site,” adds Meier. "Recently, opportunities to sell this product and still cover costs have been severely restricted. The cheese shop attached to the plant will also be affected by the closure."
As a result of this closure, the Bad Wörishofen, Sonthofen and Wertach sites will run at full capacity, so as to improve and support the marketing of special milk. In addition, Arla’s range of products will be extended. Beginning early 2016, the Arla Foods local brand Allgäuland will be available in shops again.