GERMANY – German dairy farmers are urging the country’s processors to follow the example of Arla Foods in Scandinavia and Danone in France and merge many of the 120 individual dairies in Germany one large group.

It is an approach which the producers feel would force better prices from retailers and give the country’s dairy products an extra edge in export trade through synergies in logistics and marketing.

In a policy paper, the farmers claim that present low milk prices from processors are partly due to the unequal power balance between relatively small processors and the six to eight large discount and supermarket concerns. The paper also admits that there is substantial overproduction of milk by farmers and that this must be controlled.
In the paper, the farmers also complain that opportunities for export of German dairy goods are not being efficiently exploited by processors.