Farmers’ trusted man, Atria’s supreme decision-maker: Reino Penttilä

Farmer Reino Penttilä was among those who understood the need to reform the Finnish food industry when it was preparing for the opening up of competition and fighting for its survival in the 1980s and 1990s. The transformation of the sector led to the creation in 1994 of the Finnish meat giant Atria, one of Finland’s best-known food brands. Penttilä was the most senior decision-maker of co-operative slaughterhouse Itikka and its successor Atria Plc in the years 1982–2005.

Nurmo-born Reino Penttilä (b. 1940) was given positions of trust in the organisation of agricultural producers when he was only a young man. He was a forward-looking farmer: in 1966, a 300-head piggery was built at the Penttilä farm, and in 1970, the farm was one of the first to have a broiler chicken house. When Finland joined the European Union in 1995, Penttilä expanded the farm again. He often worked at the piggery early in the morning, then took a train to Helsinki to attend a meeting and was back at the piggery in the evening.

South Ostrobothnian farmers were very devoted to their co-operative Itikka, but the strict territories of the co-operative slaughterhouses made it difficult for Itikka to operate. The central organisation, Tuottajain Lihakeskuskunta (TLK), supervised the member organisations and dictated where they could buy and sell meat. Itikka slaughtered meat but had a limited market – the large consumer centres were located in Southern Finland. Penttilä and the chairman of the board found a new director for Itikka, Seppo Paatelainen. He was more of a businessman than one interested in organisational activity, and he challenged the discipline within the co-operative organisation.

Paatelainen incorporated Itikka’s production into Itikka Lihabotnia Oy and made it public. The co-operative continued to be responsible for meat procurement. In 1988, a limited company and the stock exchange were something new and confusing in the co-operative sector. Itikka’s limited company was the first of its kind among meat co-operatives, the first meat producer to go public and the first listed company in the province. Penttilä, the highest producer representative, accepted the risks and gave his blessing to difficult decisions because the food industry was opening up to competition, export subsidies were being cut and price control was being dismantled. Penttilä and Paatelainen formed Itikka’s two-man team – the doer and the decision-maker. Paatelainen had Penttilä’s trust and Penttilä had the trust of farmers in the region. 

Itikka was put on a collision course with TLK when both of them began to plan a large food factory. Itikka was not interested in contributing to the construction of TLK’s Vantaa plant and becoming a raw material supplier. It announced that a huge EU-era food factory would be completed in Nurmo in 1992. TLK’s walls were cracking as well. In 1990, Itikka-Lihabotnia declared that it would begin to market its products in Southern Finland. The Central Union of Agricultural Producers and Forest Owners (MTK) urged South Ostrobothnians to oppose this, but the regional producers’ organisation supported the co-operative and elected Penttilä as its chairman. He also chaired TLK’s supervisory board, where he tried to prevent the construction of the Vantaa plant.

Itikka Lihabotnia Oy and Kuopio-based Lihapolar Oy, both of which had more meat than they needed, merged almost in secret. Penttilä also began to lead the board of directors of the newly founded Itikka-Lihapolar Oy. Next, the rebellious co-operatives disbanded TLK and simply informed the management of MTK and TLK of their decision in 1990. When TLK, which was established to serve its members, restricted their growth and even competed with them, it had to go. Penttilä had thus contributed to the food industry becoming independent of the back-room politics of the state and organisations, and to moving on to market-based entrepreneurship.

After Finland joined the European Union, prices came down, more expensive products rose in popularity and, surprisingly, Finns began to favour Finnish products. Atria was given the halo of a survivor. In 20 years, the Ostrobothnian co-operative slaughterhouse had grown into the largest meat processor in the Nordic countries and an international group of companies. Penttilä had reassured farmers in tough times, been in the firing line when other companies were attempting to woo South Ostrobothnian producers and justified the investments made in internationalisation instead of producer prices.

Reino Penttilä, chairman and farmer, retired in 2005. He was awarded the Finnish honorary title of ‘maanviljelysneuvos’ (awarded to individuals in recognition of their services to agriculture) in 2000. 

Source: Edited from the original text by Henttinen, Annastiina 2010. The Finnish original is available at http://www.kansallisbiografia.fi/talousvaikuttajat.