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Danish meat producer announces 350 redundancies

Danish Crown, Denmark’s largest producer of meat, is to release 350 employees due to financial challenges, the company said.

Published: 16 September 2022 15:03 CEST

Danish meat producer announces 350 redundancies

Danish Crown said it is to let 350 staff go as farmers struggle with production costs. Photo: Redstar/APPR/Ritzau Scanpix

Financial problems suffered by farmers who supply pigs to the company are behind the decision to let staff go, Danish Crown said in a statement on Friday.

Two Danish Crown abattoirs are affected. Around 275 are to lose their jobs at Sæby, while another 75 at a factory in Ringsted are also to be let go. Danish Crown currently employs around 8,000 people in Denmark.

Poor economy in the production side of the business is to blame for the decision, the company said.

“This is a very unpleasant situation. The employees affected by this have produced excellent work. Since autumn 2020 and until a few weeks ago we have almost constantly had more slaughter-ready pigs than we could slaughter,” head of production Per Laursen said in the statement.

“But the situation now looks different and it hurts to see that we now are set to say farewell to around 350 competent staff,” he said.

High energy prices are a factor in the financial struggles that have led to the redundancies, as are increasing costs of feed. These have caused many farmers to scale back or stop production of pigs for meat production.

Statistics Denmark figures show that the number of pigs in Denmark fell by almost one million during the last year. 13.4 million pigs – more than double the number of people – lived in Denmark in January 2021 according to the agency’s records.

Data from industry organisation Danish Agriculture & Food Council (Landbrug & Fødevarer)

Show additional energy costs for the sector of 20 million kroner compared to 2021, financial media Finans reported on Thursday.

Danish Crown said it will invite released staff to interviews to discuss future options. The company is obliged to launch a social plan when firing large numbers of staff under the terms of its agreement with trade unions.

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Coronavirus cull pushes Danish mink farmers to pursue new careers

Authorities ordered the slaughter of the Nordic country’s farmed mink population in November 2020 following the discovery of a mutated strain of the coronavirus.

After a two-year ban, Denmark will once again allow mink farming from January 2023. But for Vestergaard, his mink-raising days are over.

“The farm can be used for other things. That’s my view. It’s over now. It just has to go,” the veteran farmer tells AFP at a 100-hectare (247-acre) farm that will become a microbrewery.

Most of the some 1,000 farms in the Scandinavian country, once the world’s leading exporter of mink fur, have made the same choice, leaving “ghost farms” across the plains of western Denmark, where the husbandry was focused.

As he walks through the now empty buildings – facilities that must be kept intact until the state has assessed their exact value – the former farmer says he isn’t bitter.

In 1986, he bought his father’s farm — then dominated by dairy cows – and started breeding minks with 50 females until the business prospered with the help of his son, who joined him in 2006.

He had planned to gradually pass the torch.

That was until Denmark imposed a nationwide cull of the animals, over fears of a mutated coronavirus strain that was believed to jeopardise the effectiveness of vaccines.

It later emerged that the government lacked the legal mandate to demand the cull, causing a political scandal from which the country is still rearing from.

With no cases among his minks, Vestergaard was able to sell all his furs.

But faced with his business disappearing overnight, the Danish farmer found himself at a loss.

Martin, his son, returned to his job as an electrician, while exploring his passion for beer, brewing in his kitchen with a childhood friend, Thomas.

“They had this hobby, and they were close to taking it to the next level,” the former breeder explains.

“It’s going to be exciting: a new chapter,” he says.

They received grants totalling one million Danish kronor ($143,000) to convert their mink farm into a new business.

Brewing, baking and strawberries

Out of 200 applicants, about 60 entrepreneurs have received similar grants under a programme set up by the local government in Jutland in western Denmark.

Others are pursuing baking, farming strawberries or setting up farms dedicated to education.

“It’s actually a very popular scheme,” says Bent Mikkelsen, who is in charge of the plan set up by the Midtjylland region.

He estimates that today all the former farmers who have not retired are working again, describing them as a very “entrepreneurial group”.

Together with their partner Thomas Jeppesen, Poul Erik and Martin have bought nine mahogany barrels along with the equipment necessary to set up a microbrewery.

“In the spring, we will start up the brewery,” says Jeppesen, who works in IT.

“The plan is Martin and me will make the brew. After that, Poul Erik will bottle it and put labels around the bottles,” he explains.

To keep up with costs with the recent spike in electricity prices, they plan to install solar panels once they receive their compensation.

And for the time being, a return to mink farming is out of the question.

“I don’t believe that the government is going to let it grow up again,” Martin says.

Mink holdouts

A handful of enthusiasts, however, intend to resume breeding in the country, which was a world heavyweight, along with China, in a sector reviled by animal rights activists.

“Three-four farms are starting up again after January 1. All of them are in Jutland,” says Louise Simonsen, president of one of Denmark’s mink industry associations, Danske Mink.

One of the farmers has already bought about 2,000 minks, but it will be a slow and difficult start to rebuild, according to industry representatives.

“For the first one or two years, no cashflow is to be expected,” Simonsen says. “But it is a heartfelt work for them.”

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