Meggle to phase out production in Croatia by year’s end

Meggle in Osijek (Photo credit: Roko Poljak/CC license)

ZAGREB, July 16 (Hina) – The Meggle Croatia dairy company said on Thursday it was restructuring its operations in Croatia and that it would phase out production in Osijek by the end of the year, laying off 160 workers.

The German-based Meggle Group is optimising its operations with the aim of setting business models viable in all markets in the long term, the company said in a press release, adding that a decision was therefore made to restructure operations in Croatia and phase out production in Osijek.

As of January 1, Meggle will operate in Croatia under a new business model.

The decision to restructure operations in Croatia and phase out production in Osijek was made due to years-long business challenges and a series of crises that impacted operations, from aflatoxins via the Agrokor conglomerate to the coronavirus.

In the restructuring process, the employer will ensure quality severance packages and social dialogue with workers and relevant bodies, the press release said.

The company said that over the past 15 years the group had invested over HRK 130 million in production and operations in Croatia.

According to the company’s website, Meggle Croatia is the third-largest dairy company in the country with 185 employees. 

The Ministry of Agriculture has been following the situation and very soon it will meet with representatives of leading dairy industries to ensure the continuation of milk production at dairy farms that sell their milk to Meggle, Minister Marija Vuckovic said on Thursday.

According to her information, this concerns 340 dairy farms with a total production of 26 million kilograms of milk or 6% of the total quantity of milk that is delivered to Croatian dairies each year.

The Ministry of Agriculture will conduct all the necessary activities and invest all its efforts to preserve milk production at farms that are associated with Meggle, Vuckovic said.

The Croatian Agriculture Chamber (HPK) considers Meggle’s decision to be yet another blow to local milk production.

“This decision will be a new blow to milk production in Croatia given that this sector has continually recorded a fall in milk production over the past 13 years. A large number of farmers have given up and Croatia’s milk self-sufficiency has fallen to 40%,” HPK underlined.

HPK said that it is important for the Agriculture Ministry to take action and find an alternative solution for 200 small farms that sold their milk to Meggle.

HPK also announced that it would call for an urgent meeting with the ministry and relevant institutions so that potential dairies take over buying milk from Meggle’s associates in time before farmers give up and stop their production.