Denmark's Crown to cut 550 jobs due to sluggish pork demand

Pork consumption in China remains sluggish and it could take up to six months to normalize, the chief executive of Denmark's Crown told Reuters the company would cut 550 jobs in Denmark and Germany and resuspend operations at its Essen plant. Production capacity cut by 40%.

Jais Valeur, head of Europe's largest pork producer, said pork demand in China was weak due to a slump in the catering industry, despite the country's easing of new crown policies.

"At the moment I don't see any indication that Chinese imports are increasing," Valeur told Reuters in an interview, adding that the Chinese market could return to normal within six months.

China's pork imports have halved over the past 18 months amid rising domestic production, low prices and tepid demand. Pork is the most popular meat in China.

Danish Crown also said it would cut about 550 jobs in Denmark and Germany, including 400 at its factory in Essen, Germany, where it was cutting production capacity by 40%. Earlier this month, the company said it would close a factory near Hamburg with 200 employees.

Danish Crown, which produces nearly 20 million pigs a year, opened a processing plant outside Shanghai in 2019. The factory is currently running at about a third of its capacity, roughly the same level as it was during the lockdown.

"Eating out has really driven consumption in China. But what we're seeing now is a lot of people are scared and staying away from restaurants, and it's about six months away, and I think we're going to see dining in China return to normal, like we have in Europe As you can see," Valeur said.

China, the world's largest pork producer, last year saw its output rise to its highest level since 2014 as higher summer prices encouraged farmers to raise more pigs than usual. This month, however, China's Agriculture Ministry urged farmers to reduce excess pork production.

The slowdown in Chinese demand has knock-on effects on European markets. Outbreaks of African swine fever in some European countries, including Germany, have prompted Spanish producers to boost production targeting the Chinese market.

"All this meat is now flooding the European market, where consumers are now dealing with inflation and worried about the future," Valeur said.