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Lactalis agrees on lower milk supply
The French dairy giant Lactalis has signed an agreement with supplier association OPLGO to limit the milk supply for three years. In this way, the parties want to be less sensitive to fluctuations in the market.
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In the contract Dairy company Lactalis and suppliers' association OPLGO are discussing a reduction in milk supply of 2% on an annual basis. OPLGO brings together 1080 Lactalis suppliers in the west of France and represents a volume of 670 million liters. In total, Lactalis processes 5 billion liters of milk in France and almost 22 billion kilos worldwide. Lactalis also wants the agreements with OPLGO to apply to the company's entire French milk supply.
Become less sensitive
Given the current state of affairs on the European dairy market, Lactalis's move seems remarkable. Chairman Frédéric Epineau of OPLGO still defends the agreement with Lactalis. "By supplying less milk, the dairy giant has to sell less product to supermarkets and the company is commercially stronger," he says. According to OPLGO director Christine Lairy, the volume restriction does not hurt members.
Lactalis did not pay the highest milk price last year, but according to French dairy farmers, the company always tries to be slightly higher than the largest cooperative in France, Sodiaal.
Lactalis also has a number of factories in the Netherlands and Belgium. This concerns Leerdammer in the Netherlands and in Belgium the former Walhorn factory in Lontzen (near Liège). It is not yet clear what policy Lactalis advocates for the Netherlands. Leerdammer has already seen several tens of millions of kilos of milk disappear last year.