Mar 11, 2026 (MarketLine via COMTEX) --
The group is developing a "redeployment plan" for the 14 employees affected, which would look to move them to other parts of the business.
Spanish drinks group Damm has confirmed it will cease production at a milk and milkshakes plant in Mallorca.
A statement from the group confirmed it has informed staff of its decision to end operations at the site on the Balearic island this year.
The Estrella Damm brewer did not disclose when in 2026 expected to shut the site, which makes products sold under the Agama brand.
In its statement, the company said it was developing a "redeployment plan" for the 14 impacted employees and would look to move the staff to other operations within the group.
The move to end operations at the facility was "driven by the difficult situation the dairy sector in the Balearic islands has faced for several years", Damm said.
Higher production costs and lower sales volumes for "higher-priced milk brands" have contributed to "a lack of profitability in the business", Damm said.
"One of the main factors has been the structure of the dairy market in the Balearic Islands and the competitive price disadvantage resulting from the higher purchase prices paid for milk to local dairy farmers in Mallorca, compared with the strong price competitiveness of brands produced on mainland Spain using milk sourced from other autonomous communities," the company added.
The retail price of locally produced milks in Mallorca is 50% greater than private-label brands and 18% higher than an unnamed "leading manufacturer brand", which are both produced outside of the island.
Damm said it has been working with local government officials over the past six months to find ways to continue running the plant and sell the Agama milk brand in the local market.
One of the solutions proposed had included creating a agricultural cooperative, "promoted by the livestock sector, Ministry of Agriculture, Agama employees and other industrial and/or financial partners", the company added.
The proposal did not come to fruition, as "the promoters of the cooperative recently announced their decision not to continue with the initiative, considering that the market context did not guarantee its industrial or economic viability".
Damm confirmed to Just Drinks it still has a presence in dairy through chocolate-milk business Cacaolat, in which it owns a 50% stake. Spanish food manufacturer Idilia Foods owns the other half of the business.
Idilia Foods struck a deal to acquire the 50% shareholding from Damm in 2024.
Under the deal agreed at the time, both businesses said they would aEURoejointly manageaEUR Cacaolat, which markets drinks under its namesake brand, as well as Letona milk and Laccao chocolate milk, which are manufactured in Santa Coloma de Gramenet, in Barcelona.
http://www.datamonitor.com
Republication or redistribution, including by framing or similar means,
is expressly prohibited without prior written consent. Datamonitor shall
not be liable for errors or delays in the content, or for any actions
taken in reliance thereon
COMTEX_478973123/2227/2026-05-12T01:48:18
Copyright (C) 2026 Datamonitor. All rights reserved
