Dairy giant Arla hit by triple whammy of inflation shocks

The UK’s biggest dairy supplier has revealed it is facing multiple inflation pressures from rising energy, packaging and labour costs.

Arla boss Ash Amirahmadi also admitted that the nationwide shortage of lorry drivers meant it was a “real challenge” to deliver to hundreds of shops every day.

His comments came after data from this week showed how firms were shifting costs over to customers.

Over September, households were hit with a 1.7 per cent rise in food prices.

READ MORE: Arla warns of ‘summer of disruption’ due to driver shortages

Speaking at Sky’s “Big Ideas Live” event, Amirahmadi said: “Just simply being able to get the product from our factories to supermarkets is a real challenge.

“We are very mechanised when it comes to our production of milk and dairy products in factories, but we need drivers to take that to the shops.”

Britain is thought to need around 100,000 hauliers.

Amirahmadi continued: “On average we’re delivering to about 2,300 shops a day, and we’re regularly not able to deliver to about 10 per cent of our shops.

“That gives you an idea of the type of shortage we’re dealing with.”

In August, the dairy giant admitted that the driver shortfall had forced it to cancel a quarter of its retail deliveries.

The surge in energy prices has also affected “all aspects” of Arla’s business.

“Energy is clearly one of the key cost drivers… we’re a food company, so packaging rises as well,” Amirahmadi said. 

“So inflation would be one of the key issues that we’re navigating as a business.”

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