Milk Package Consolidates Weak Market Position

EU - The European Milk Board (EMB) has said that the EU milk package resolution is a "shaky result".

9 March 2012

1 minute read

President Romuald Schaber said that not referring to compulsory contracts between producers and processors shakes the common market considerably.

"Now producers can continue to be played off against each other."

Producer organisations are to negotiate on behalf of producers, which is good, but the pooling limits of 3.5 per cent of milk production across the EU and 33 per cent nationally are unfortunately much too low, he said.

Mr Schaber said: "The processors as bargaining partners already have a market share that is triple that of these pooling limits in some cases, so they will always dominate negotiations. Moreover, the articles of the regulation make it very difficult for members of co-operatives to have a producer organisation negotiate on their behalf. "

He stresses that the new provisions cannot guarantee healthy market activities.

He said that whilst a European price monitoring instrument is a positive move forward, this is not enough. The costs of milk production, market supply and demand must also be ascertained.

"Just as every house needs a solid foundation, the dairy market also needs a good framework to enable a fail co-existence without distortions in competition.

"This framework includes no clear improvements for European milk producers, instead it cements their weak market position," Mr Schaber concluded.