Purchasing power: French dairy leaders targeted by antitrust investigation

Descent among major French milk producers. On Friday, the Competition Authority announced that it had carried out several checks on the sector’s giants due to potentially “anti-competitive” practices during the gathering.

On Thursday, FDA investigative services began unannounced visits and seizures of companies suspected of engaging in anti-competitive practices in the cow’s milk supply sector, “after the permission of the Freedom and Detention Judge,” without identifying the manufacturers involved.

“There were document confiscations in Sodiaal, Savencia, Eurial and Lactalis,” the concerned industrialist said, confirming Figaro’s information. Together, these four companies collect more than two-thirds of French milk.

“We confirm the visit yesterday (Thursday) Autorité de la concurrence at our offices in Paris. At this stage, we cannot comment on the reasons for this visit. We are calm and we are at the disposal of the authorities,” Sodiaal responded in a press release. The leading French dairy cooperative (20% of the collection), in particular, produces Candia milk and Yoplait yoghurts.

A representative of the cooperative group Agrial confirmed the visit of the inspectors of the Directorate to the premises of his dairy department Eurial, which produces, among other things, Soignon cheese. When asked by AFP, the number one milk producer Lactalis (brands Président, Lactel, etc.) declined to comment, while Savencia (Caprice des Dieux, St Môret, etc.) did not respond. The giant Danone, for its part, indicated that it had not been visited by inspectors.

“Exchange of best practices” in the viewfinder

“According to the information we have, the investigation is focused on an ancient practice called debt collection agreements Where cross collection “, explained the player in the sector. When they use it, the producers agree that the nearest dairy farm takes his milk, even if he has a contract with a competitor. The challenge: to limit the mileage of trucks that take milk from farms and save on gasoline.

The breeder is paid by the manufacturer with whom he has a commercial agreement. The two companies then maintain their accounts and reimburse each other through a “re-billing” system. “This solution was found to facilitate the logistics of collection. Thousands of trucks collect milk every day in France in hard-to-reach areas,” the source said.

“The shorter the collection, the more you minimize health risks,” the industrialist also explained on condition of anonymity. The scheme also allows the breeder to choose the industrialist he wants to sell his milk to, rather than defaulting to the one closest to his farm, he says.

On its website, dairy association Cniel, which did not wish to comment on the current investigation, speaks of “exchanging best practices between dairies.” Except that the Competition Authority clearly sees a potential anti-competitive practice. “At this stage, these interventions obviously do not predetermine the guilt of the companies concerned in the alleged actions, which, if necessary, will only be established by an investigation on the merits,” however, the Office specified.

The Wise Men of Eshel Street also pointed out that “unvisited companies” could come up with the Authority’s “indulgence program”. Companies that claim past or current cartel membership can benefit from preferential treatment with “full or partial immunity from fines imposed.”