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Finnish Pork Market Faces Tough Times

by 5m Editor
8 May 2008, at 8:40am

FINLAND - Finland's pig meat industry has had a difficult start to the year, largely due to high feed prices and difficult market conditions.

Pig market analysts say the problems are heightened in Finland by cheaper products form Denmark and Germany hitting the market.

And they say it will be hard for the Finnish industry to pass on higher prices to consumers.

The two leading pig meat companies, HK Scan and Atria have both reported drops in profits, despite increasing sales.

HK Scan saw sales for the first three months of the year come in at €510.1 million compared to €498.6 million last year.

However, EBIT for Finland dropped to €4.1 million compared to €7.3 million last year in Finland. In the Baltic region is was down to €1.4 million from €2.5 million last year. The company said that the performance was eroded by losses in the red meat business.

EBIT in Poland was in line with a year earlier. Sokolów performed above target but Pozmeat and primary production business Agro-Sokolów were in the red.

HK Scan CEO Kai Seikku said: "The difficult situation in the pork market in particular eroded the company's performance in all market areas. The loss-making meat business depressed earnings especially in the Baltics and Finland. Commercial operations furthermore performed with less distinction in March than anticipated, especially in Finland and Sweden."

He added: "It has been an arduous start to the year, and we can expect many of the challenges faced in the first quarter to carry over to the current quarter as well."

Atria saw Group's net sales rise by 9.9 per cent reaching € 303.4 million compared to € 276.0 million last year. However, EBIT was € 6.8 million compared to € 11.5 million.

Atria said: "The increasing cost of raw material across the food chain has hampered the Group's performance. The profitability of Atria Finland has been affected particularly by the imbalance in the price of pork between Finland and the rest of Europe."

5m Editor