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ACM finds unfair practices in Leerdammer
The Netherlands Authority for Consumers & Markets (ACM) has imposed a penalty payment order on Lactalis Leerdammer for violating the Unfair Commercial Practices Act. The company may not unilaterally change the milk price, the ACM states in the ruling that is a first for the dairy farming and dairy industry.
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In response, Lactalis Leerdammer has announced that it will make the milk price system more transparent from now on. In October, talks will also begin with representatives of dairy farmers. An invitation to do so was sent today. However, the company is not simply accepting the ruling and is appealing.
The ACM decision follows a complaint from the Leerdammer Collectief Suppliers Association (LVLC). Lactalis Leerdammer must not only adjust the terms of delivery, for example by including a transparent and objective pricing system, but also submit the amended terms for approval to the milk suppliers, so that they can still be negotiated.
Aligning delivery conditions
LVLC has filed multiple complaints with the ACM about the delivery conditions, but these have been rejected. LVLC is an association of dairy farmers with more than four hundred members, who only supply their farm milk to Lactalis Leerdammer, the ACM reports. With the ruling, Lactalis Leerdammer is obliged to bring the delivery conditions into line with the Wet OHP Landbouw within three months at the latest. If not, Lactalis must pay penalty payments up to a maximum of €1.050.000.
General manager of Lactalis, Jan Verbessem, says that the company wants to cooperate in the execution of the ruling, but according to him the company needs more time than the three months that the ACM gives for this. The company also wants a review of the interpretation that the ACM gives to the law. Royal Lactalis Leerdammer is therefore appealing. According to Lactalis, this legal step is separate from the will and dedication of Royal Lactalis Leerdammer to make the milk price system more transparent. "We hope that the end result will lead to a new standard in the sector," Verbessem reports.
Also discussion at Vreugdenhil Dairy Foods
Suppliers' association Holland Dairy Producers, which supplies Vreugdenhil Dairy Foods, also has a discussion with this buyer, but here the parties seem to be reaching more agreement on the terms of delivery.