FrieslandCampina cuts entrance premium

The board tells this in one webcast which was created as a warm-up for the new round of member meetings that started today (April 5).
Chairman Sybren Attema makes it clear that FrieslandCampina believes it is necessary to stop the loss of milk volume for many reasons. “It is not motivating,” he says, “not for the members, not for the employees, not for partners and customers.”

Poorly yielding milk has largely disappeared
Moreover, the volume of poorly yielding milk has now largely disappeared, he adds. Since 2016, a total of 1,2 billion kilos of milk has been lost.

So things need to change, the board believes. The door for newcomers and returnees will therefore open again. The condition is that dairy farmers who want to join are in the cooperative's operating area. This applies to the Netherlands, Germany and Belgium. Anyone who is with another processor and wants to switch is now welcome. In Belgium, FrieslandCampina certainly wants to strengthen its ties with suppliers, including by paying them a better milk price. FrieslandCampina is committed to maintaining the milk supply for the factory in Aalter.

In addition, it becomes easier to join through partnerships and even members who left through the Dutch Milk Foundation (DMF) can return. The board believes that no additional requirements should apply to them. However, new members must comply with and agree to FrieslandCampina's sustainability policy, as laid down in the Foqus planet program. A new version is being developed (version 3.0), which will be voted on by the Members' Council at the end of this year.

Less money needed for entry
The proposal is that those who want to join will soon have to bring less money. The entry premium will increase from €15 to €5 per 100 kilos of milk. Suppliers who have been supplying for a long time, but are not yet members, only have to deposit €3 per 100 kilos. In addition, they simply have to purchase delivery certificates at €8 per 100 kilos of milk.

The board has shown that the latter requirement is sometimes a significant obstacle for existing members who want to make a growth leap. It therefore proposes that a phase-in model be introduced for this, so that the entire sum does not have to be coughed up at once. These proposals will be discussed in the coming months, after which a decision must be taken by the Members' Council on June 22. In December, the Members' Council must make a decision on a modernized version of Foqus planet. The existing version is not sufficiently stimulating, not sufficiently focused and does not bring FrieslandCampina's sustainable goals closer quickly enough, according to board member Niels den Besten.

Need more money in the pot
The Foqus planet pot is now available for €40 million annually. That amount must increase if there are stronger incentives for further sustainability. The required money must largely come from the market. For example, through CO2 reduction. This now raises €7 million annually. That amount must rise to €2030 million by 2 - the date on which FrieslandCampina aims to emit a third less CO2015 than in 70. FrieslandCampina also wants to raise more money for Foqus planet 3.0 from other sources. Which one is not yet clear.