COPENHAGEN, March 2: Scandinavian food group Arla, which has been the chief economic victim of the row over anti-Islamic cartoons, said on Thursday the conflict would cost it 400 million Danish kroner (64 million dollars) this year.

“Arla has so far estimated its loss to 400 million kroner for the year,” the Danish-Swedish company said in a statement, adding however that the amount was far from set in stone.

The estimated loss, due to lost revenues in the Middle East and surplus milk sold at a loss as industrial butter and powdered milk, “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 percent of the amount sold before the boycott”, the dairy company, Europe’s second largest, said.

Arla, which does between six and eight percent of its business in Arab countries, has been hard-hit by widespread Muslim boycotts of Danish goods to protest against the blasphemous caricatures that first appeared in a Danish newspaper last September.

“Even if the situation looks very difficult, we believe that Arla has a future in the Middle East,” Arla chief Peder Tuborgh said, adding that “We have an in-depth knowledge of the market (in the Middle East) and will not give up so easily.”—AFP