Counter-offensive launched against discounters

GERMANY/THE NETHERLANDS – Milk processors are being urged to co-operate with a price control organisation to form a united front against discounters’ loss-leader policies.

The German dairy association Milchindustrie-Verband (MIV) has confirmed that informal talks on the idea are underway between major processors, not only in Germany but also on a European level through the European Dairy Association in Brussels.

“These discussions are still unofficial,” said Michael Brandl, a spokesman for MIV. “But the aim is to first of all discuss possible strategies and, of course, to consider the legal situation if the industry decides to go for such a move.” The problems caused for dairy companies by large discounters is now considered a Europe-wide problem. In Sweden, Lidl is importing German milk because the largest supplier there, Arla Foods, has refused to supply private label products cheaply. Similar problems are expected in Denmark where Lidl is planning to open 60 new stores.