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(CHRISTOPHE ENA/AP)

Financial Times

Dairy king Danone feels the squeeze

Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

Danone just loves to give its years a sense of identity. 2012 was a “step change,” 2013 is about “transition” and next year will be “back to growth.” Linguistic pedants might ask why a step change has to be followed by a transition. Tuesday’s full-year results give the answer. Although sales growth at the French dairy group is ticking along nicely at 5 per cent, margins are falling and profits are flat. The blame lies in the weak European dairy market, home to a fifth of sales.