Norwegian dairy co-op Tine has announced the restructure of six domestic facilities as milk consumption falls.
The co-op‘s board has decided to close the dairy facilities at Sem and in Kristiansand, and production changes are being made at the plants at Frya, Sola, Jæren, Lom and Skjåk “to ensure competitiveness and equip the company for the future”.
Around 100 full-time jobs are expected to be cut, with another 250 people affected by the shake-up. Some employees will be offered roles at other plants and Tine says the changes will be handled “in a proper way, in co-operation with both the employees concerned, and union representatives”.
Tine – which has its roots in Rausjødalen Setermeieri, Europe’s oldest dairy co-op – has 8,291 owners and processes milk from around 7,000 farms. It recorded revenue of Nkr24.9bn in 2022, up 3.4% on 2021 figures.
Milk consumption continues to fall in Norway, a problem for Tine which receives around 80% of its income from the domestic market. It already has significant excess capacity at several facilities, and faces tough competition with increased imports of dairy products.
The changes will provide an average saving of around Nkr100m a year from 2026.
“Closing jobs is never easy,” said chair Marit Haugen, announcing the cuts. “At the same time, we cannot shield ourselves from the harsh reality where sales of the white milk in Tine have decreased by almost 40% in the last 10 years. Combined with significant imports and strong competition, we must be conscious of our responsibility to build Tine’s plant structure for the future.”
Haugen added that “Tine must at all times have a production structure that is adapted to the market and secures the nutritional basis for dairy farmers throughout the country.
“The goal is always to keep costs down in order to secure Norwegian milk production, with farms all over the country. Let’s not forget how important it is for local value creation and vibrant districts – all around Norway.”
CEO Ann-Beth Freuchen said the cuts follow a “comprehensive and thorough” decision-making process.
“I fully understand that this is demanding for those affected,” she added, “but we must do everything in our power to be competitive and further develop an efficient, innovative and forward-looking brand company. In this way, and only in this way, we succeed in the market and can continue to be a major employer in the future as well.”
The facilities at Sem and in Kristiansand will be shut towards the end of 2025, while milk and cream bottling at Sola and at Frya will cease during 2024 and 2025 respectively. Stock will be retained at Sola, and be closed at Frya, which will continue to be a focus plant for yoghurt, crème fraîche and cottage cheese, where market development is positive.
Goods from these facilities will still be distributed through Tine’s own logistics operation.
Tine has also been hit by falling consumption of brown cheese. “Despite aggressive marketing, we eat over 30% less brown cheese per inhabitant today than we did just 15 years ago,” says Tine.
Production of the cheese in Lom and Skjåk will continue, but on a smaller scale. At the same time, plans are being made for a separate concept based on the pot-cooked brown cheese, which will be based on the traditional, original recipe from Gudbrandsdalen.
Parts of the production will gradually be moved over to Byrkjelo or Storsteinnes, which will mean a reduction in staffing. At the same time, Tine promises “an exciting investment in brown cheese produced in the traditional way in Lom and Skjåk. If we succeed in this, and the consumer is on the journey, it can create a positive development for brown cheese”.
