ECONOMY

Farmers accuse dairies of forming milk cartel

Greece’s Cattle Breeders Association (CBA) said yesterday they supplied the Competition Commission with data showing the existence of a cartel in the fresh milk processing industry in early June, without results to date. «The data we supplied showed most clearly that there was agreement to harmonize prices among the milk processing industries and to prevent farmers form changing customers. They banish them,» members of the association told a press briefing. «Price harmonization is also proved by the data of the Greek Milk Organization, according to which the price of the raw material has been falling since the beginning of the year. And this applies not just to one firm. They all reduced the prices they paid in unison. Let them then explain what a cartel is if this is not one… We supplied what data we had to the competition watchdog and waiting for the results,» said the members of CBA, which represents more than 6,500 milk producers. They denounced the milk processing firms for «unacceptable and blackmailing behavior.» CBA’s spokesmen said the top issues were the price of milk paid to the producer and to what extent Greek milk is used in the production of dairy products. They said they opposed extending the shelf-life of fresh milk from four to eight days, as proposed by the Development Ministry, arguing that the ministry’s view that this will lead to a fall in consumer prices by encouraging imports is mistaken. «There are no data or studies proving that imports have a positive impact on consumer prices. Indeed, imported long-life milk is not cheaper. It seems that yet again the proposal aims to serve the interests of big supermarket chains,» said CBA’s Giorgos Kefalas. He argued that Greece is already a big importer of animal products, the total cost of which is higher than oil imports and lags only behind the expenses for military hardware! Meanwhile, Greece’s second largest dairy industry, FAGE, said yesterday it was suspending the production of fresh milk and concentrating on long-life milk, demand for which in the last five years has increased by an average of 22.3 percent. FAGE sources said the decision was unrelated to the latest developments in the sector, as the company has faced declining market shares in fresh milk in recent months and sinking profitability due to expiry date returns. Milk producers are asking for a price of 40 cents per liter – in line with prices elsewhere in Europe – from 33 cents today and 36-37 cents in the beginning of 2006. They argue that the cost of production is 36 cents and say they want a national pricing system. Steady rises in inelastic cost items for farms and pressure from milk processors have led the number of producers to fall from more than 20,000 to 6,820 over the last 10 years According to CBA data, 92 percent of milk is distributed by 10 large firms. Responding to questions, members of the panel also said they feared the emergence of a cartel in the production of feta cheese, as many small cheese production units are closing. Characteristically, in Argolida prefecture, their number has dwindled from more than 400 10 years ago to just three, they said.