30 January, 2008 – Arla Foods announced it has recovered 95% of the sales volume it had in the Middle East prior to the boycott that followed the 2006 Muhammad cartoon crisis.
However, the Swedish/Danish dairy co-operative admitted its performance in the important Saudi Arabian market, at just 83% of pre-boycott sales, still lagged behind the rest of the region.
By the end of 2007 the company had hoped to completely recover the sales volume it had before the 2006 crisis, when its products were widely shunned by consumers in the region after a Danish newspaper published cartoons depicting the Prophet Muhammad.
"We have seen further positive developments during the second half of 2007. So even if we haven’t quite reached our target, our ambitions are unchanged and we believe in continued growth in the Middle East," said Finn S. Hansen, BG Director, Consumer International.
Arla Foods said it would target “in-store” activities in Saudi Arabia as part of its ongoing bid to boost sales.
Mr Hansen said: “It’s taking a little longer than expected to fully recover our position, but we’re confident that our efforts will continue to pay off. The fact that spending power and dairy product consumption are also increasing across the region is a further reason for maintaining our ambitions."
However, Arla also said that it its performance in the immediate future could be “uncertain” as prices for its products had increased due to the scrapping of export subsidies and the falling value of the dollar.
The company said it was expecting a customer reaction in the wake of the price rises but it was too early to say what the full effect would be. Arla’s announced its latest increase in December.
In 2004/05, Arla’s net turnover from its Middle East operations totalled DKK 2.59 billion (EUR 348.6 million). But following the boycott, this dropped to DKK 1.59 billion (EUR 213million).