The Danish meat manufacturer Danish Crown will also allow Danish suppliers of piglets to become shareholders in the group and thus tie them more closely to the company. They can then receive additional compensation for pigs slaughtered and traded by Danish Crown.
At the end of last year, Danish Crown proposed modernization of the 137-year-old cooperative after disappointing annual figures and a turbulent board meeting. That idea was not supported by then CEO Erik Bredtholt. He emphasized that opening the cooperative to outside investment would be "unrealistic" because it would create a "shareholder group with conflicting interests."
Bredtholt was not supported by the rest of the board, did not stand for re-election and resigned in November. He was succeeded by Vice-Chairman Asger Krogsgaard.
Many Danish pig producers sell their animals abroad and that is why Danish Crown sometimes lacks pigs for slaughter. Just like pig breeders, cooperatives of piglet suppliers must receive a purchase guarantee, with a bonus payment at the end of the year.
“This is an offer to piglet producers to secure their sales, just as a shareholder of Danish Crown has always had the guarantee of the sales of his slaughter animals. Over the years we have had a number of piglet producers ask to become shareholders,” said Asger Krogsgaard, the new CEO of Danish Crown.
“With the piglet supplier co-ownership model, we are creating 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 occur every now and then,” said Krogsgaard in an explanation of the proposal.