Arla to close German cheese plant
European dairy cooperative Arla Foods has decided that a continued operation of the Kißlegg-Zaisenhofen dairy in the German district of Ravensburg is not economically viable. The decision comes in response to a massive fall in prices and strong pressure from competition in international markets. The closure of the site on 29 February 2016 will affect 38 employees. “This was not an easy decision to take,” says Winfried Meier, senior vice president in 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.”
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 much more cheaply than is possible at the Kißlegg site,” explains 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 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. “We will do everything possible to ease the situation for our employees,” Meier says. This includes the opportunity for the Kißlegg workforce to apply for one of 19 jobs that Arla Foods is offering to employees mainly in the Allgäu area but also at other locations.
“For us, the Allgäu is an important area for Arla Foods,” Meier notes. Therefore the Bad Wörishofen, Sonthofen and Wertach sites will be better used in future, by runing these sites at full capacity so as to improve and support the marketing of specialist milk. In addition, as already announced, Arla’s range of products will be extended. From early 2016, Arla Foods local brand, Allgäuland, will be available in shops again. Initially, milk and a few other soft cheese and butter products will be marketed under this well-known brand.
