FrieslandCampina suffers €149 million loss in 2023; Hit hard by lower consumer spending

FrieslandCampina suffered a loss of 149 million euros in 2023, the company announced on Tuesday. Last year was a challenging year for the dairy company. Consumers had less to spend, resulting in FrieslandCampina selling less milk, cheese, and other dairy products. The company also suffered from lower market prices and high reorganization costs.

The disappointing annual results follow a week after FrieslandCampina announced it was cutting 1,800 of its 22,000 jobs. More than half of these job losses will happen in the Netherlands. The reorganization cost the company 136 million euros.

Turnover fell by 7.1 percent to 13.1 billion euros. According to the company, its results were affected by consumers having less to spend due to the high inflation, the sale of its German activities, and unfavorable exchange rates.

FrieslandCampina consists of over 15,000 member dairy farmers. The company gives them a guaranteed price for their milk. But that setup caused problems last year when market prices fell more than the price guaranteed to dairy farmers. In 2023, member farmers got a milk price of 48.08 euros per 100 kilograms of milk, 16.2 percent less than the year before.

And due to the disappointing results, member farmers will also not receive any additional cash payment, which is comparable to a dividend. “A disappointment, especially considering the increased costs for our members and the costs of further sustainability on the farm,” CEO Jan Derck van Karnebeek said.

According to FrieslandCampina, it made good progress on sustainability last year, reducing the company’s greenhouse gas emissions by 9.4 percent and that of member dairy farms by 4.3 percent.

This year, FrieslandCampina expects a slightly higher demand for dairy worldwide. But it added that “ongoing conflicts and geopolitical instability” will keep costs for raw materials, packaging, and transport high.