Danish meat plants react nervously to 6% wage rise

By Gerard O’Dwyer, in Helsinki

- Last updated on GMT

Related tags Denmark Danish crown

Leading Danish meat processing companies fear that a recently negotiated three-year wage agreement for workers in the industry threatens to erode producers’ already low margins.

Major players, such as Danish Crown, can be expected to respond to the 6% wage hike – an average of 2% a year over three years – by pursuing further cost-reduction programmes at plants in Denmark in a bid to maintain margins at existing levels.

"The industry had hoped the wage increase would be a moderate one, but it has not been listened to, and ultimately this could cost jobs in the meat processing sector,"​ said Danish Crown spokesperson Anne Villemoes.

The wage deal was negotiated by Landsorganisationen i Danmark (LO), the Danish confederation of trade unions. Danish Crown’s submission to the wage talks warned of "dire consequences"​ if wages increased above 3%.

Meat processing companies have since argued that the 6% hike threatens the industry’s ability to compete against rival plants in Germany and Poland, where production costs are up to 50% lower than in Denmark.

The increase follows on previous labour contracts under which wages in the meat processing sector rose by around 25% in the 10-year period to 2013. However, the LO’s president, Harald Børsting, rejected industry fears, claiming that the three-year deal "is moderate"​ and provides the industry with greater predictability as regards base costs going forward.

Related topics Meat

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