Lactalis Adjusts Milk Prices Due to European Surplus Impact

Lactalis, one of the world's leading dairy groups, has announced adjustments in its milk pricing strategy due to an unprecedented surplus of dairy products in Europe. Emmanuel Besnier, the company's president, explained that the oversupply is affecting the industry significantly, including the Galicia region in Spain, where Lactalis is the largest milk collector with a market share of 16.3%.

During a recent event in Granada, Besnier stated that the current volume of surplus dairy products in Europe is something the industry has never encountered before. This situation has led Lactalis to reduce its supply contract prices, with April contracts reflecting this downward adjustment. Previously, in January, the base price was set at 38 cents, marking a reduction of 4.5 cents from the previous cycle. This price cut has sparked protests from agricultural unions in key production areas such as Lugo.

Besnier also noted that while Spain's production structure offers some advantages due to its lower reliance on exports compared to countries like France or Germany, the overall impact of the surplus is still felt. Lactalis collects around 500,000 tons of milk annually in Spain, positioning it at the center of these market tensions.

In addition, Besnier emphasized the strategic importance of strong brands like Puleva, Ram, and President in the face of growing competition from supermarket private labels. He noted that despite the consumer price increases in 2022 and 2023 benefiting private labels, leading brands are regaining momentum in 2024 and early 2026. Besnier argued that strong brands are essential for driving innovation and ensuring long-term market development, preventing the sector from becoming merely an outlet for industrial surplus.