Characters of vertically integrated cooperatives and their retail activities in Denmark

Abstract

In 2000 based on the amalgamation of MD Foods in Denmark and ARLA in Sweden the ARLA Foods Danish – Swedish cooperative became the biggest common dairy production, manufacturing and marketing co-operative in the European Union, which has very considerable important experience for the Hungarian supply chain management in food industry. From both of them share of Sweden was more by 2% than Denmark's one, namely 29% in 2000, which decreased to the level of 26,4% in 2001. Opposit to this data, share of Denmark in turnover of ARLA Foods cooperative was 24%, which mostly did not change. The ARLFA Foods cooperative plays important role in Denmark, because this is the first cooperative in Denmark and Sweden. Mostly the most important cooperatives concern food production additionally to dairy products, for example meat, fruit, vegetables, feed, fur, grass seeds and egg The study analyses modelling system for vertically integrated product channel by through this cooperative, which has dairy producing – manufacturing factories in 13 countries, trading subsidiarities in 20 countries with 16 thousands employees during the first decade of 2000s. This cooperative is working as a large transnational corporation with managing extra large production capacity based on the market strategy. Total turnover of cheese, butter and conserved dairy products reached 52-53 % by the end of 2000s, which show that, more than half of value of turnover belonging to the ARLA Foods has been covered by considerably value added or highly manufactured products in this decade. Recently by the end of 2010 Denmark exports its food industrial products to 150 countries of the world economy. The ARLA Foods faced some issues needed for solving, for example: Quality demands, Food safety, Sustainable Food Production. The ARLA Foods in order to implement solutions for these issues, created new Marketing strategy to produce new products and brand, new and environment friendly technology, setting up the Retail Network in the world economy to extent its turnover.