NETHERLANDS – Lactalis Leerdammer, a subsidiary of French dairy giant Lactalis, has been ordered by the Netherlands Authority for Consumers and Markets (ACM) to amend its milk pricing system within three months following allegations of unfair commercial practices.
The Dutch competition authority has accused the company of violating the Wet OHP Landbouw Act by unilaterally altering milk prices in pre-agreed contracts with suppliers, sparking complaints from the dairy farmer collective, Leerdammer Collectief.
The ACM’s investigation found that Lactalis Leerdammer had breached the terms of its supply agreements by adjusting the monthly milk prices paid to farmers without engaging in proper negotiations.
This left farmers in a vulnerable position, as they were unable to quickly stop milk supplies and had no choice but to accept the prices set by the company.
As a result, the ACM has mandated that Lactalis Leerdammer revise its pricing system, making it more transparent and objective, or face penalties of up to US$1.2 million.
In a statement, the ACM noted the need for transparency in the dairy sector, particularly in how prices are determined and communicated to milk suppliers.
In addition, the authority demanded that Lactalis Leerdammer submit revised terms to its milk suppliers for approval, allowing for negotiations on the new conditions.
Lactalis Leerdammer, which has been a major player in the Dutch cheese market for over a century, acknowledged the need for greater transparency in its milk pricing system.
On September 23, the company pledged to initiate discussions with Dutch dairy farmers to develop a more open pricing framework.
However, the company highlighted concerns about the three-month timeline imposed by the ACM, stating that more time would be necessary to achieve meaningful changes.
Additionally, Lactalis Leerdammer said that it intends to seek a review of the ACM’s interpretation of the Wet OHP Landbouw Act while maintaining its commitment to increased transparency.
“This legal step is independent of Royal Lactalis Leerdammer’s willingness to make the milk pricing system more transparent,” the company stated. “We hope that the end result will lead to a new standard in the sector.”
According to Jan Verbessem, general manager of Lactalis Leerdammer, the company has been operating as a local production company in the Netherlands for over 100 years.
“A good and open collaboration with the dairy farmers is of great value to everyone involved. For this reason, Royal Lactalis Leerdammer is taking steps to make the milk pricing system more transparent,” he added.
Earlier this year, the company was fined in Italy following a complaint by the farmers’ association Coldiretti, which criticized the price paid to farmers for their milk.
Similarly, in 2022, Lactalis was ruled against in Australia after terminating agreements prematurely, breaching the country’s dairy code of conduct.
The conflict in the Dutch dairy sector follows another pricing dispute involving Arla Foods, one of Denmark’s largest dairy companies.
Arla is currently embroiled in a disagreement with Danish retail giant Salling Group over its pricing strategy, which has led to the removal of Arla products from stores such as Netto, Bilka, and Føtex.
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