European milk producers want the Spanish law on unfair trading practices to be implemented
Half of the milk Alexander Vialetes gets from his flock of 300 sheep in southern Franceis collected and processed by the dairy giant Lactalis (producer of the “President” brand – b.r.), at a price that he cannot influence.
Vialetes, who also makes his own blue cheeses, doesn’t know where his milk goes after it’s loaded onto a Lactalis truck. But he is sure of one thing: it should have cost more, Politico reports.
During negotiations last year, a producer group he is a member of had to accept the price offered by Lactalis, despite a French law that seeks to ensure farmers can receive fair prices for their produce.
After another group of suppliers negotiated terms with Lactalis, Vialetes and his partners sought mediation – as required by the so-called Egalim law – in hopes of getting a better deal that would cover their production costs. To no avail: the mediator said they had to agree to the Lactalis price or give up.
“Lactalis is not the only milk processor. All the big groups, whether cooperative or private, behave the same way,” Vialetes said.
Minimum purchase prices?
The bitter experience of farmers like Vialetes is one of the reasons for the widespread protests this year – although much of their fury is directed at the European Union’s green bureaucracy and competition from cheap imports. Their complaints reignited a political debate in France over whether to guarantee minimum prices for produce. President Emmanuel Macron has emerged as a late adopter of the idea – drawing fire from opponents on the left and right who accuse him of stealing their policies.
The debate raises the specter of a return to antiquated price support policies, which may do little to alleviate rural hardship — and could instead encourage overproduction and a return to the “milk lakes” and “oil mountains” of the past. This forced the European Union to reform its Common Agricultural Policy and farm subsidy program.
Wrath of the Predator
Lactalis, owned by the secretive Besnier family, has come a long way from its beginnings in the 1930s as a small Camembert producer in Mayenne, western France, to now being the largest dairy in the world. During that time, the company has repeatedly angered farmers.
The latest round of agricultural protests in France was no different. Farmers occupied the company’s headquarters last month. Others blocked a Lactalis truck and redistributed its milk to local farmers in the Haute-Saône department. Anger even reached the Salon International de l’Agriculture, an annual farm show, where protesters attacked the Lactalis stand.
“We targeted [Лакталис] as a value predator,” said Stéphane Gallet, a dairy farmer in Brittany and representative of Peasant Confederation a left-wing farmers’ union that organized the demonstrations against Lactalis.
“This company reported a turnover of 28 billion euros in 2022 and made a profit. At the helm you have two brothers and a sister who are billionaires. This is a company that refuses to pay its farmers properly, to pay them a price that covers the costs of production, wages and social protection, but which is making record money,” he told Politico.
Pierre Maison, who makes raclette cheese in the alpine department of Haute-Savoia, agrees.
“In a quasi-monopoly situation, they dictate the price,” he said.
In his region, small dairy cooperatives are fighting back against Lactalis as the company buys stakes in local dairy cooperatives producing reblochon cheese.
Lactalis excuses himself
“We should not conflate the actions of agricultural unions with negotiations that take place under a private legal contract with a producer organization,” Lactalis said in a written response to Politico.
Lactalis said prices are affected by the fact that half of the cow’s milk it collects is processed or sold outside France, where prices are lower – and currently falling. It said it had raised purchase prices by 30 percent in the past two years and paid more than its competitors in 2022.
The company reported a 14 percent drop in profits in 2022 — its net margin was just 1.4 percent — and those have been reinvested in the business, the dairy giant says.
In response to the protests, the French government tried to shift the blame to big food companies, promising better protection for farmers in their negotiations with processors, manufacturers and supermarkets.
A ray of hope from Spain
For Maison, the farmer from Haute-Savoie, France, he should take inspiration from neighboring Spain, which has turned the EU’s Unfair Trade Practices (UTP) directive into an important shield for farmers.
Heralded by farmers from Namur to Naples, the Spanish version of the NTP law is the strongest in Europe. It allows for anonymous reporting of rule breakers, provides for fines of up to €1 million, enforces greater transparency in contracts and creates observatories to monitor margins for each product.
“Only in Spain is this law effective and has actually led to a price difference for farmers: it actually obliges every link in the food chain to cover its production costs, starting with the producers,” according to the European Coordination for Via Campesina (ECVC), which represents small farmers.
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