Danish meat plants react nervously to 6% wage rise
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.
