Lactalis Reduces French Milk Processing to Focus on Premium Products

Lactalis, the leading global dairy producer, has announced a strategic decision to reduce its milk processing operations in France by 450 million litres, equating to a 9% decrease of its total 5.1 billion litres annual processing. This change is set to take place progressively until 2030.

The company aims to pivot away from volatile bulk commodities, such as milk powder, and towards higher-margin consumer products, including cheese and yogurt. Serge Moly, Lactalis’ supply director, highlighted that the value of surplus milk sold as bulk commodities is often low and subject to global market volatility.

The plan has faced criticism from the French National Dairy Farmers’ Union (FNPL), which labeled it as a 'withdrawal from the French dairy sector.' Union leader Arnaud Rousseau expressed concerns over the reliability of milk collection for local producers.

Global market pressures, including declining demand from China and competition from New Zealand, have influenced Lactalis' decision. Additionally, geopolitical tensions, such as China's anti-subsidy probe into EU dairy products, further complicate the international trade environment.