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Last Updated: Thursday, 2 March 2006, 15:05 GMT
Arla predicts 37m boycott cost
Saudi man looking at sign urging a boycott of Danish products
Arla sales ground to a halt in the Middle East
Arla Foods has put a fresh figure on the cost to its business of the boycott of Danish products in the Middle East.

The Danish-Swedish dairy giant now estimates that the boycott will cost it 37m ($64m) this year.

Its previous predictions have been as high as 50m, and at one time it said it was losing more than 1m a day.

The boycott, which started in January, was caused by caricatures of the Prophet Mohammed first published in a Danish newspaper.

'Not giving up'

In a statement on Thursday, Arla said its new estimate could change yet again, but insisted it remained committed to its Middle East markets.

Even if the situation looks very difficult, we believe that Arla has a future in the Middle East
Arla boss Peder Tuborgh

It said the new 37m estimated loss "assumes that Arla cheese and butter are quickly returned to stores in the Middle East and that Arla by the end of 2006 sells 50% of the amount sold before the boycott".

Arla, Europe's second largest dairy foods business, does between 6% and 8% of its trade in Arab countries.

"Even if the situation looks very difficult, we believe that Arla has a future in the Middle East," said Arla chief Peder Tuborgh.

"We have an in-depth knowledge of the market [in the Middle East] and will not give up so easily."

Although the offending cartoons were first published in small Danish newspaper Jyllands-Posten last September, the controversy did not flair up until they were reprinted in other European newspapers in January.

Arla has already put full-size advertisements in major Saudi newspapers to disassociate itself from the cartoons.

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