ZuivelNL must better account for farmers' money

According to the Netherlands Authority for Consumers & Markets (ACM), the organisation has promised this in response to a complaint from the Leerdammer farmers' supplier association LVLC. In its own announcement, ZuivelNL confirms these agreements.

Materially, not much will change at ZuivelNL. The organization does not have to abandon any activities. Financial figures will be published in more detail and therefore more insightful. Connections between cash flows and activities will also be presented differently.

The ACM does not make a statement about the contribution that processors pay to ZuivelNL. Dairy farmers pay 0,055 cents per 100 kilos of milk to ZuivelNL, processors pay 0,025 cents per 100 kilos of contribution.

The ACM sees the improved transparency of ZuivelNL as a strengthening of the position of dairy farmers towards their buyers. Because the commitment of ZuivelNL removes the risk that the dairy farmer pays for activities that are not related to the sale of milk.

Agricultural OHP Act
The LVLC had filed a complaint with the ACM about the contribution payment that is paid to ZuivelNL via the purchaser (now Lactalis). According to the LVLC, this payment would not be related to the sale of milk. This is prohibited under the Unfair Trade Practices in the Agricultural and Food Supply Chain Act (Wet OHP Landbouw). With this commitment, ZuivelNL complies with the rules of the Wet OHP Landbouw. ​​This law aims to strengthen the position of farmers, fishermen and horticulturists in the chain. The ACM has not determined that ZuivelNL violates the Wet OHP Landbouw.

Contribution to ZuivelNL
ZuivelNL is the chain organisation of the dairy sector in the Netherlands, co-founded by the Dutch Dairy Organisation (NZO). Dairy farmers who supply to a customer who is a member of the NZO, pay a monthly contribution to ZuivelNL via their customers. Customers (such as Royal Lactalis Leerdammer and FrieslandCampina) charge this contribution to all their dairy farmers. The amount of the contribution depends on the amount of milk that the dairy farmer supplies and the dairy processor purchases. The customers themselves also pay a contribution to ZuivelNL. ZuivelNL uses these contributions for various activities, such as research, food safety and animal welfare.

Payments for sale of milk
Under the Agricultural OHP Act, it is prohibited for milk buyers to request payments from suppliers that are not related to the sale of milk. Dairy processors who are members of the NZO charge the contribution to their dairy farmers on behalf of ZuivelNL. ZuivelNL has now promised to use the contribution from dairy farmers only for activities that are related to the sale of milk and that the contribution they raise will benefit the dairy farmer. ZuivelNL makes it clear to dairy farmers what they are paying for.

Dairy farmers have influence on the level of the contribution contribution through the members of ZuivelNL in which they are represented. ZuivelNL promises that it will recalibrate the level of the contribution every three years, so that it remains in line with the Wet OHP Landbouw.

The ACM checks whether ZuivelNL complies with its commitment. The ACM assumes that ZuivelNL will continue to collect the contribution in a manner that is in line with the Wet OHP Landbouw.

Earlier on rapped the ACM Lactalis Leerdammer on the fingers because of the unilateral determination of the milk price. Lactalis indicated that it would appeal against this. Shortly afterwards the Disputes Committee for Unfair Commercial Practicesn Vreugdenhil Dairy Foods a binding instruction to better consult with suppliers about the milk price. This was in a case between a supplier and the company. The disputes committee looks more at the civil side of a dispute, the ACM looks from the administrative law trajectory.

The complaints of dairy farmers about the payment of milk money and the payment of contributions have been studied by the ACM and the Disputes Committee OHP for a number of years, without much action initially. Now various rulings follow in quick succession, which indicates that the supervisors have chosen a line and have started to act accordingly. Incidentally, the ACM does not provide direct insight into its actions and considerations.