Photo: Henrik Montgomery / TT
Dairy farmer Malin Östlingsson worries that revelations over excess spending at Arla could lead to even more financial woes for farmers. Photo: Henrik Montgomery / TT Credit: Photo: Henrik Montgomery / TT

Dairy farmers worry Arla revelations could lead to boycott

According to Swedish Television's investigative program Mission Investigate (Uppdrag Granskning), the Swedish-Danish Arla dairy cooperative has wasted money on travel, entertaining and expensive golf trips, even as the milk industry is in crisis.

Malin Östlingsson, who has been a milk farmer for 10 years and belongs to the Arla cooperative, is worried about how consumers will react to the news that Arla has spent money irresponsibly.

"The first reaction will be that they'll want to boycott Arla, but that's not the right way to go," she said. "That just makes us more vulnerable."

Reporters from Mission Investigate viewed internal material from Arla, from the year 2014, and found that executives and managers had made private purchases at the expense of the farmers they represent. For example, one manager bought clothes, alcohol, toys, driving lessons, and a plane ticket for a family member, all on his company card.

Arla has said it has allowed employees in the past to use their company card to make private purchases, so long as they reimbursed Arla, but the CEO Henri de Sauvage Nolting, admits the system has been flawed. In May 2014, he started an internal investigation to see what the cooperative could do to save money, and Arla says that what the investigative program has latched on to now has already been uncovered by the company and fixed.

"As from the first of May 2015 we have a zero tolerance on private purchases; but I'm also responsible for the period beforehand, so we went back and we said okay, all the people who have used this privately – and it's a handful of people – have actually paid back all these private purchases," de Sauvage Nolting told Mission Investigate. The investigative team notes that it was not given documentation to prove that the purchases were paid back, however.

Mission Investigate also pointed out that de Sauvage Nolting had bought a plane ticket to Paris for his wife on the company tab. He replied that it was reasonable, because it was a business trip and participants were entitled to bring their spouses, but he says he has now reconsidered and paid it back.

The Federation of Swedish Farmers worry that what has been revealed could hurt milk farmers even more financially.

Helena Jonsson, the federation's chairperson, told news agency TT, "This is extremely unfortunate. Milk farmers in all of Europe - and not least in Sweden - have a really tough economic situation."

Stefan Gård, the chair of Sveriges Mjölkbonder, an organization for dairy producers, told TT, "We're on our knees here as milk farmers, and they do this. Even if it's not large sums of money, it still shows a certain nonchalance."

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