At the end of last year, following disappointing annual results and a turbulent board meeting, Danish Crown proposed modernizing the 137-year-old cooperative. That idea was not supported by then CEO Erik Bredtholt. He emphasized that opening the cooperative to outside investments would be 'unrealistic' because it would create 'a shareholder group with conflicting interests.'
Bredtholt was not supported in this view by the rest of the board, chose not to stand for re-election, and resigned in November. He was succeeded by vice-chairman Asger Krogsgaard.
Many Danish pig producers sell their animals abroad, which sometimes causes a shortage of slaughter pigs for Danish Crown. Just like pig breeders, cooperatives of piglet suppliers must have a purchase guarantee, with a year-end bonus payment.
"This is an offer to piglet producers to secure their sales, just as a shareholder of Danish Crown has always had a guarantee for the sale of their slaughter animals. Over the years, we have had a number of piglet producers who asked if they could become shareholders," said Asger Krogsgaard, the new CEO of Danish Crown.
“With the co-ownership model for piglet suppliers, we create the framework for binding cooperation between the piglet producer, the fattening pig producer, and the slaughterhouse – a kind of integrator model – that can help protect all parties against drastic fluctuations that occasionally occur,” Krogsgaard said in an explanation of the proposal.