Copenhagen, Feb 28 - Danish-Swedish dairy cooperative Arla said on Wednesday it was cutting production after anger in the Muslim world over the reprinting of a satirical cartoon of the Prophet Mohammad curbed demand.
The Middle East is the group's most important market outside Europe, with Saudi Arabia as the largest single market.
Arla Foods, whose global brands include Lurpak butter and Apetina cheese, said it was cutting about 150 tonnes per week of capacity at its Bislev dairy plant in North West Denmark. The plant currently produces about 550-650 tonnes per week.
"Some customers are ordering while others are reluctant to renew orders because they are uncertain about how the situation will develop. It's not a real boycott but more a general hesitation," Arla Foods Sales Director Finn Hansen, said in a statement.
Tensions have flared again after Danish newspapers reprinted a satirical cartoon of the Prophet Mohammad. The papers have reprinted one of a series of drawings in protest at what police said was a plot to murder the cartoonist who drew it.
Many Muslims consider depictions of the Prophet offensive.
Denmark's dairy industry was hit hard by the original publication of the drawing as anger flared up in Muslim countries around the world in 2006.
Arla said the production would mean some 8-10 job cuts.