Danish Crown, the Denmark-based pork processor, has said it has taken some months to pass on rising pigmeat costs to its retail customers. Jais Valeur, chief executive of Danish Crown said that pig prices paid to primary producers had risen rapidly over the last six months but that retailers were slow to pass this increase on to consumers.
Valeur made the comments as Danish Crown revealed a 4% increase in sales to €4.1bn for the first six months of its financial year to the end of March. The company said this was the first time in its history that half-year sales had surpassed the €4bn mark.
However, rising pig prices saw the company’s raw material costs increase during the six-month period which negatively affected margins. Half-year operating profits declined 7% to €138m, as margins narrowed 40 basis points to 3.3%. Danish Crown said it paid an extra 15%, or €81m, to pig producers during the year for pork.
European pig prices have risen sharply over the last year as a result of strong demand from Asia, primarily China, coupled with tightening pig numbers in Europe. Danish Crown processed 630m kilos of pigmeat in the first half of the year, a 3% decline on last year.
Danish Crown reported a solid performance in its beef operations as market prices remained stable since October. The company processes in excess of 500,000 head per annum and controls 67% of all cattle slaughtering in Denmark.
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