Valio hit by Swedish milk imports but brands show strength

Related tags Milk

Finnish dairy processor Valio has revealed that Swedish milk imports hit the profitability of its 'basic milks unit' in 2011, but the firm has hailed the success of recent additions to its branded product portfolio, which include 'digestion yogurt', soft quark and fermented milks.

Asked why Swedish milk was affecting Valio's basic milk volumes so much - imports have cut the co-operative's volumes by almost 25% in the past two years - a spokeswoman told DairyReporter.com the slump was due to "competitors' strategy and low sales prices".

Valio said in an earnings release that its basic milk market share in Southern Finland (the most competitive market) was around 35%.

Nonetheless basic milks account for only 8% of Valio's net sales - €1.822bn in 2010 - and the spokeswoman pointed to the success of its branded products such as Valio OLO yogurt and Valio Plus milk and sour milk lines: the former in Finland and Sweden and the latter in Finland.

Valio also said its profitability improved in Russia during 2011, and the spokeswoman said this was not due to more favourable exchange rates alone.

"We have also managed to improve the product mix there into more added value direction. That is for instance to sell more fresh products and added value cheese," she said.