Danish Crown: The board's proposal for the remaining payment is already in place
Although there are over two weeks until Danish Crown's financial statements are presented, the board of directors has now decided on the remaining payment to be proposed to the board of representatives. Since the proposed remaining payment for pigs is below the 70 øre that the unit owners were promised, the board of directors has chosen to inform the owners now.
"It is annoying that we cannot deliver what we expected, but the increased duty on exports to China came so late in the financial year that it unfortunately costs the remaining payment to the suppliers of pigs and sows. We have chosen to announce now because we want to be as transparent towards our owners as possible, but it is a shame, because without the Chinese duty increase we would have paid the promised 70 øre", says Niels Ulrich Duedahl, Group CEO at Danish Crown.
When China increased the tariff on pork from the EU at the beginning of September, the price was subsequently reduced by 50 øre with effect from Monday, September 12. At that time, there were only a little more than two weeks left in the financial year, so when it became clear that all goods in stock and on their way to China would also be subject to tariffs, work began to make up for the loss, because the bill could only be passed on to Chinese customers to a limited extent.
"It is only now that we are so far along with the annual accounts that we know exactly what the consequences will be for the remaining payment. That does not change the fact that it is a pain to have to disappoint our owners. On the other hand, it also shows that we always prioritize sending as much money to the owners in the listing as possible. This makes us a little more vulnerable if something dramatic happens in the market, but fortunately that rarely happens", says Niels Ulrich Duedahl.
For the suppliers of cattle, the picture is the opposite. For them, the remaining payment will be a whopping 110 øre per kilo, compared to the expected 70 øre, because beef prices towards the end of the financial year have exceeded expectations.
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