Monday 22 October 2012
Supermarket cuts milk prices
The Dutch supermarket chains Albert Heijn and Jumbo wrote to their suppliers in mid-September informing them that they had unilaterally decided to axe prices by two per cent on existing contracts, writes Sieta van Keimpema (Vice President of the European Milk Board and President of the Dutch Dairy Board).
Their reasoning was that the suppliers had benefited from the supermarket chains’ expansion policy and so the contracts had to be amended accordingly.
This practice makes it patently obvious that the food trade has no basic rules for ensuring fair business relations in the sector. In reply, food suppliers told the media that measures like unilaterally slashing contractually agreed payments or extending terms of payment were the norm.
That is why on 14 September 2012 the Dutch Dairymen Board (DDB) – one of the EMB’s two member organisations in the Netherlands – in conjunction with other representatives of Dutch agriculture demonstrated outside the head office of Albert Heijn.
The aim was to make the managers of the supermarket chain aware that every cut imposed on the suppliers would be passed on immediately to the farmers.
Major supermarket chains have a social responsibility. The management of Albert Heijn apparently realised this and retracted the decision to cut prices paid to the suppliers.
But that is not enough for the DDB. The only solution to this essentially moral problem is clear trade rules and laws that restore the balance in the food chain.
The current Milk Package is of no use in this respect.
Many politicians are now voicing their concerns about the business practices of the Albert Heijn and Jumbo supermarket chains.
It is to be hoped that the critics will not stop at merely speaking but will fight on our side to restore the balance in the food chain as soon as possible.
That is in the interest of farmers and suppliers alike.
Source: Argentine Beef Packers S.A.
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