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Many retailers have not yet lifted a ban imposed after the publication of controversial cartoons of the Prophet Mohammed in a Danish newspaper.

The company, which receives two-thirds of its annual income from Saudi Arabia, estimates that the boycott will cost each of its 10,000 Danish and Swedish farmers more than £4000.

However, Finn Hansen, executive director at Arla, has said that there are 'positive signals' from retailers following full-page ads in Arab newspapers dissociating the firm from the controversy.