Norwegian dairy cooperative Tine has announced it is making restructuringt six of its domestic facilities against a backdrop of falling milk consumption.
The impacted sites are its dairy plants in Sem, Kristiansand, Sola, Frya, Lom and Skjåk.
Around 100 full-time roles are expected to be cut, but some 250 people will be affected by the shake-up, Tine told Just Food, with some employees being offered roles at other plants.
Part of the restructure will include the closure of its dairy facilities in Sem and Kristiansand by the end of 2025.
The milk and cream bottling lines at Sola and Frya will also be discontinued, with the former shutting next year and the latter going in 2025. Sola will still be used for storage while Frya will prioritise its yogurt, crème fraiche, and cottage cheese production line, which has seen “positive” development.
Operations at the company’s plants in Lom and Skjåk – which are dedicated to the manufacture of brown cheese – will continue running “on a smaller scale”, due to shrinking demand for the product in Norway.
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By GlobalData
At least 30% less brown cheese is being consumed today per person in Norway in comparison to 15 years ago, according to Tine.
Despite the drop in consumption, the company said it plans to invest in a new pot-boiled brown cheese product, developed using a traditional recipe from the Gudbrandsalen Valley.
“If we succeed in this, and the consumer is on the journey, it can create a positive development for brown cheese,” said Christian Granlund, Tine executive director of supply chain.
Some production lines at Lom and Skjåk will be moved to Byrkjelo or Storsteinnes, which Tine said will bring job losses. It is unclear how many jobs will be cut at each of these sites.
Product distribution is expected to continue as normal at Tine’s logistics centre.
The changes come as milk consumption continues to plummet in Norway, which has resulted in excess capacity at Tine’s plants.
Sales of the company’s unflavoured milk products have decreased by 40% in the past decade, Tine chairman Marit Haugen said.
Norway’s increasing imports of dairy products and toughening market competition are said to be to blame.
Commenting on next steps for employees affected by the plant restructure, Grandlund said: “We will work to find good future solutions together with the individual employee – inside or outside Tine.
“Tine has good traditions for handling this in a proper way, in cooperation with both the employees concerned – and union representatives”.
In a statement, the group board said these decisions were made “to ensure competitiveness and equip the company for the future.”
Tine said the changes will bring savings of around Nkr100m ($9m) a year from 2026.
The news follows on from Tine’s company-wide restructure announcement last November, which resulted in the shut down its Ålesund dairy plant and around 30 job cuts.
In a statement, Haugen said: “Combined with significant imports and strong competition, we must be conscious of our responsibility to build TINE’s plant structure for the future”.
She added that Tine’s production structure must stay “adapted to the market” so as to keep costs low and “secure Norwegian milk production, with farms all over the country.”
The company recorded revenue of Nkr24.9bn in 2022, an increase of 3.4% on 2021 figures. Some 81% of the net income came from its Norwegian market.
Working under a cooperative structure, Tine has 8,291 owners and processes milk from around 7,000 farms.
