(Bloomberg) -- Arla Foods, the maker of Lurpak butter, said it needs to save at least 400 million euros ($500 million) because currency losses soared after Britain voted to leave the European Union.
Last year, the dairy cooperative lost 150 million euros from currency swings, mainly caused by the weakening pound. The record cost cuts, which will run over three years, are needed to ensure Arla’s 11,200 farmers in northern Europe stay profitable, the company said.
“Two unexpected developments have hit us, both of which are outside of our control,” Chief Executive Officer Peder Tuborgh said. “These are the currency impact of Brexit on our actual performance and the impact of the reversal in commodity prices on fat and protein.”
The dairy company, which employs a total of 19,000 people, said it’s too early to say how many jobs will be cut.
Arla makes about 75 percent of its products for the U.K. market locally. The Aarhus, Denmark-based cooperative generates 25 percent of its revenue from the U.K.
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