Arla’s UK boss Peter Giørtz-Carlsen has been promoted to a new role heading up its Europe operation as part of a restructure that could see up to 500 global jobs shed by the dairy co-op.
Giørtz-Carlsen, who rose from 56th to 24th position in this year’s Grocer Power List, will be succeeded in the UK by Tomas Pietrangeli, who takes over the role on 1 March and currently heads up Arla’s Danish market.
The restructuring would allow the business to deliver on its strategy of increasing organic growth from the current 2% to 4% by 2020, and develop its business across eight key global dairy categories and six market regions, said Arla - creating “a more efficient and globally focused structure” that enabled its markets “to strengthen their commercial and consumer focus”.
It also involves the creation of a new executive management team of seven, which will be organised into two geographical areas: Europe and international, and the creation of more globalised supporting functions in areas such as supply chain, finance and HR.
“Arla has grown its business significantly in recent years both organically and through mergers,” said CEO Peder Tuborgh. “However, more milk is being produced globally, and Europe is experiencing pressure on prices and very little growth, which means competition is fierce.”
He noted consumer needs were becoming more diverse, and “therefore we need to be more agile and cost-efficient to remain competitive”, adding it would be ”necessary to change the ways we work” in order for Arla to remain relevant to its preferred partners.
The dairy co-op will start a consultation process with under-threat staff during the coming weeks, with potential job losses confirmed by mid-March. Hourly salary roles in production and transport would not be affected by the restructuring, Arla said.
“We have strengthened the UK business significantly in 2015 by growing our own-label and branded volumes in all dairy categories, launching the Arla brand, and driving cost efficiencies,” said Giørtz-Carlsen. “We now need to take the next step, which will be to structure our business to capture the full benefits of our global scale.”
“It’s unfortunate a number of roles will be impacted and we will work closely with our colleagues over the coming months to minimise the effect that these changes will have on our people,” he added.
The restructuring follows the announcement last week that Arla’s milk supply contract with Tesco would be halved in size, while the co-op has been forced to reduce its farmgate price by 0.8ppl to 21.81ppl for February, due to a surge in global milk production.
Arla’s new UK boss Pietrangeli has worked in senior roles for global fmcg companies - including Proctor & Gamble, Unibrew and Reckitt Benckiser - for almost 20 years. He joined the business in 2014.
“As Arla’s largest market, the UK is a key part of our organisation with ambitious plans for the coming years,” he said. “I’ll be focusing on championing our leadership role in the UK dairy industry as well as delivering the very best for our farmer owners, even during these challenging times.”
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