Arla Foods director surprised by strong reactions over selling of Swedish milk in Finnish grocery stores (UPDATED)
Vanhanen weighs in with personal boycott
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Hans-Åke Hammarström
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Matti Vanhanen
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Arla Foods head of Consumer Nordic, Group Executive Director Hans-Åke Hammarström, is astonished by the reactions of Valio milk producers in Finland.
Hammarström refers to the heated discussion in Finland over the decision by HOK-Elanto and a couple of other regional cooperative retail chains to switch from selling regular milk products produced by the Finnish dairy cooperative Valio to selling similar products by the Swedish-Danish dairy Arla Ingman instead.
The milk sold in the cooperatives is produced in Finland, but what has vexed people is the fact that Arla Ingman imports milk from Sweden as well. The milk containers, however, will be clearly marked if they contain Swedish milk.
“I do not understand why the Finns are afraid of Swedish milk”, says Hammarström.
In blind tests people have not been able to tell the difference between the Finnish and Swedish milk.
Hammarström praises Valio’s research and development and the lactose-free products in particular, with which the company should make good money. In Sweden especially Valio yoghurts sell well.
“But susceptibilities are always associated with milk. It is an everyday product consumed by children in particular”, Hammarström explains.
In Sweden milk questions cause turmoil even inside the country’s borders: in Northern Sweden people do no necessarily approve of milk produced in Skåne in the south of the country.
According to Hammarström, the price war does not benefit anyone - in the long term not even the consumer. Instead of focusing on producing cheap basic milk, the dairies’ future lies in developing refined products with added value.
“Take a look at the Danish milk market”, Hammarström says. “It has clearly been divided into two.”
One half of the milk sold in Denmark is considered "cheap milk" that is sold under the retail chain’s own brands, or is simply marked down.
The other half more and more clearly consists of specialty milks. One person only drinks Thise organic dairy’s milk from Jersey cows, while the next person swears by Öllingegaard organic dairy’s “slightly creamier” milk’s taste.
Yet another person only uses the “country house” milk with five per cent fat content in his coffee.
“What is happening in Copenhagen will land in Helsinki as well. It just takes time”, Hammarström predicts.
If Hammarström is right, in the future even the Finnish retailers will use their milk’s taste as the marketing gimmick.
In Denmark organic milk has already taken over even the budget stores. As far as organic products are concerned, Hammarström compares Finland to Northern Sweden. In both areas the natural environment is still considered so clean that the concept of opting for “clean and natural” organic products is seen as a bit alien.
“But this will change. It’ll start with Helsinki and Kuopio and other university cities”, Hammarström predicts.
Arla Foods was born in 2000, when the Danish MD Food and the Swedish Arla joined forces.
Arla Foods is owned by Swedish and Danish milk producers and it is the eighth largest dairy product enterprise in the world.
The company’s largest market area is Great Britain. Last year 26 per cent of Arla Food’s net sales came from the UK. Sweden and Denmark’s shares were 20 and 19 per cent, respectively.
Just over six per cent of Arla’s net sales came from Germany. This Finnish market’s share was five per cent.
Last year half of Arla’s milk was produced in Denmark, 23 per cent in Britain, 21 per cent in Sweden, and 3.2 per cent in Finland.
Arla Foods products are sold in more than 100 countries. The company’s international brands include Lurpak butter and Castello cheese. Ingman joined the group in 2006.
In his Friday blog, the Finnish Prime Minister Matti Vanhanen (Centre) reported that he changed his local grocery store of the past 25 years to another one, because he could no longer find the milk of his choice there.
“This is the consumer’s right that nobody can touch”, Vanhanen said in justification of his personal boycott.
Supporters of the Centre Party, which is traditionally close to Finnish farmers, have been among the most strident in their opposition to the move by HOK-Elanto, seen as a slap in the face to Finnish milk producers.
UPDATED 14:30 - Valio milk to return to shelves of HOK-Elanto stores
In the latest development in the so-called "milk war", it seems consumers have won the first skirmish, as according to an announcement on Monday afternoon, HOK-Elanto - part of the retail S-Group - announced it would be keeping Valio's fat-free and low-fat milk cartons on its Prisma supermarket shelves after all.
Earlier the chain had decided to drop Valio milk products from its assortment, with the exception of specialist milks, following a deal struck with Arla Ingman.
After the agreement was made public it prompted a brisk discussion, with even the PM joining in on the side of consumer choice.
Now the HOK-Elanto CEO Matti Niemi reports that the deal with Arla Ingman is still in force, but that the Valio milks will be coming back to the Prisma stores. Other parts of the chain will make their own decisions later.
We will have more on this subject tomorrow if the story develops.
Previously in HS International Edition:
HOK-Elanto retail chain chooses Swedish-Danish Arla Ingman dairy goods over domestic Valio (5.3.2010)
Helsingin Sanomat
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| 8.3.2010 - TODAY |
Arla Foods director surprised by strong reactions over selling of Swedish milk in Finnish grocery stores (UPDATED)
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