Retail alliance, private labels and their impact on producers – experiences from the dairy sector

Alexander Anton, EDA Secretary General

Association of

national dairy industry

associations of 21 EU

Member States

Cooperative

and private milk

processors

EDA members

President & Presidium

Michel Nalet, Lactalis

Ingo Müller, DMK Jan Teplý, Madeta

Attilio Zanetti, Zanetti Kasper Thormod Nielsen, Arla

5

Retailer alliances & Private Labels

➥ - what type of dairy processors are international retail alliances negotiating with? Does it cover

only the large ones, or also smaller SMEs? Does the share of dairy negotiated via alliances differ

across countries?

➥ - since private label is important in dairy, we'd like to know a bit more on what type of

arrangements are made with retail alliances on private label sourcing?

➥ - do your members see an increase in private label contracts negotiated via alliances vs. direct

relations with retailers? Since when, how fast is this growing or not?

➥ - what are the negative and positive experiences ?

➥ - is there a difference in private dairies vs. cooperatives' experience with RAs?

➥ - potential effects pass on (or do not pass on) through to farmers?

The World of EU Dairy

8

EU milk prices (Jul 2019 vs. Jul 2018)

Cheese

37%

Butter

19% Drinking Milk

16%

Cream

10%

Skimmed Milk Powder

6% Acified Milk

4%

Whole Milk Powder

4% Other fresh products

2%

Wheypowder

2%

EU production in milk equivalent

Cheese

37%

Butter

19% Drinking Milk

16%

Cream

10%

Skimmed Milk Powder

6% Acified Milk

4%

Whole Milk Powder

4% Other fresh products

2%

Wheypowder

2%

➥ 72% consumer products

➥ 28% further processing and HORECA

EU production in milk equivalent

Cheese, Germany: 2017 - 2018

Value

(million €)

Volume

(1,000 Tns.)

(Nielsen MarketTrack 2018)

741 745

306 303

4,310 4,649 3,035 3,113

Value

(million €)

Volume

(1,000 Tns.)

60%

40%

29%

71%

Cheese, Germany (Nielsen MarketTrack 2018)

Drinking milk

Drinking milk

94 92

97 99

88

81 85

90

94

79

90

80

86 84

No real alternative channels beyond Modern Grocery Retailers -

share in % drinking milk distribution (2004-2012)

Supermarket - big (400 -

800 m²)

8%

Hypermarket - small (>

1500 m²)

20%

Hypermarket - big (1500

- 5000 m²)

19% Discount coops

16%

Aldi, Lidl, Norma

36%

Germany (Nielsen MarketTrack 2018)

18

Retailer alliances & Private Labels

➥ - what type of dairy processors are international retail alliances negotiating with? Does it cover

only the large ones, or also smaller SMEs? Does the share of dairy negotiated via alliances differ

across countries?

➥ - since private label is important in dairy, we'd like to know a bit more on what type of

arrangements are made with retail alliances on private label sourcing?

➥ - do your members see an increase in private label contracts negotiated via alliances vs. direct

relations with retailers? Since when, how fast is this growing or not?

➥ - what are the negative and positive experiences ?

➥ - is there a difference in private dairies vs. cooperatives' experience with RAs?

➥ - potential effects pass on (or do not pass on) through to farmers?

“Milk and dairy

products are a

vital source of

nutrition”