Lurpak owner to rake in £1.3bn more in sales as butter prices rise

THE owner of Lurpak expects to make an extra £1.3bn in sales this year as butter prices soar.

The Danish company, which is owned by 12,500 farmers, raised its sales outlook for the year helped by higher dairy prices.

Arla Foods now expects to record annual sales of up to €14bn (£12bn), an increase from previous estimates of as much as €12.4bn.

Earlier this year tubs of Lurpak spreadable butter became the target of thieves as the price of a 1kg (2lb 3oz) pack reached more than £9.

One Asda store resorted to protecting the costly 500g tubs of Danish butter, which were on sale for £6, with electronic tags.

Arla’s revenues jumped 17pc to €6.3bn in the first half of the year from €5.4bn last year, while gross profit rose 12pc to €1.3bn.

Lurpak sales rose 14pc to €347m, but the co-operative warned that customers have started shunning some of its products as households adapt to the cost of living squeeze.

European shoppers are buying fewer branded goods and opting for cheaper alternatives, the company said, owing to higher prices.

Peder Tuborgh, the chief executive of Arla Foods, said: “Changes in consumer behaviour continue to be multifaceted and difficult to predict and we expect our branded growth will slow down further.”

Sales increased to €3.5bn compared to €3.2bn in the same period last year in Arla’s European and UK division, where the company said it maintained its “[price] competitiveness”.

It also announced it would hand out an interim payment to farmers for the first time thanks to elevated milk volumes. Profit share was 3pc.

Arla’s average prepaid milk price to farmers increased 30.9pc in the first half of 2022 compared to the same period in 2021, with further increases over the summer.

Last week Denmark asked its competition watchdog to investigate recent price increases to ensure customers are not being fleeced.

Dairy has been at the sharp end of food and drink price inflation, with milk leading the charge.

The average price of a pint of semiskimmed milk has seen a marked step change since July and at a now average 86p, has increased 65pc, year on year, according to the most recent Grocer 33 survey. Cheddar is 39pc more expensive, while butter is up 33pc.