Merger conditions farm milk
When it approved the merger of Friesland Foods and Campina, the European Commission placed merger conditions on raw milk to prevent FrieslandCampina dominating the raw milk market in the Netherlands.
The following conditions apply:
- FrieslandCampina is obliged to make raw milk available to dairy companies in the Netherlands that process raw milk into fresh dairy products and/or naturally matured cheese, subject to predefined conditions.
- To encourage FrieslandCampina member dairy farmers to switch to another buyer of raw milk, a departure scheme applies, which provides for a departure premium.
- The conditions apply to standard milk of Dutch origin, and therefore not to German or Belgian member milk, nor to organic or biodynamic milk. The conditions relate 1.2 billion kilos of raw milk annual milk supply.
Making raw milk available to third parties
FrieslandCampina is obliged to make raw milk available subject to predefined conditions. This obligation applies to the fresh dairy business in Nijkerk, now sold to Arla Foods, the Delta Milk cheese business in Bleskensgraaf. the third-party milk availability ceiling of 1.2 billion kilos of milk has been reached. Therefore, there is no more raw milk available for other parties. The companies need to be registered at the Rijksdienst voor Ondernemend Nederland (rvo.nl, a Dutch government organization for entrepreneurs) as an (industrial) processor of raw milk in the Netherlands.
Start up premium for member dairy farmers
Dutch member dairy farmers who cancel their membership of FrieslandCampina and who will supply their regular milk to another buyer of raw milk in the Netherlands will receive a start up premium of 5.00 euro for each 100 kilos of milk. The milk volume supplied in the previous calendar year determines the level of the premium. The premium is paid within two months of a dairy farmer who has actually started to supply milk to another buyer. If a dairy farmer ends his or her business within three years or returns to FrieslandCampina, the departure premium is to be repaid pro rata. This is also the case when non regular milk is being supplied.
Third-party milk availability reached ceiling
In December 2013 the ceiling of third-party milk availability was reached (see also this press release: Dutch Milk Foundation reaches third-party milk availability ceiling). Member farmers of FrieslandCampina in the Netherlands can still terminate their membership at any time under the normal procedure using the departure scheme if they migrate to Deltamilk or Arla Foods. The volumes they take with them are deducted from the volumes available to Deltamilk or Arla Foods.
Migration to other players
A different situation applies to member farmers who wish to migrate to other players (other than Delta Milk or Arla). If they want to leave after September 1st, their request cannot be fulfilled immediately. Migration, including the premium, is only possible after each full year. This has the following implications:
- applications submitted after 31 Augst 2016 and up to and including 31 August 2017: exit on 1 March 2018 or later;
- applications submitted after 31 Augst 2017 and up to and including 31 August 2017: exit on 1 March 2019 or later.
The Dutch Milk Foundation (DMF) is responsible for implementing and monitoring the availability of raw milk to third parties and the departure scheme for member dairy farmers as described in the merger conditions set by the European Commission in 2008 prior to approving the merger between Friesland Foods and Campina. FrieslandCampina is required to provide a maximum of 1.2 billion kilos of Dutch raw milk available to producers of fresh dairy products and/or naturally matured cheese.
Dutch Milk Foundation & merger conditions
The independent foundation Dutch Milk Foundation (DMF) is responsible for implementing and monitoring both schemes (merger conditions) as set during the merger of Friesland Foods and Campina by the European Commission in 2008. FrieslandCampina must supply 1.2 billion kilo Dutch farm milk, on an annual base, to producers of fresh dairy products and/or naturally matured cheese.
The implementation and monitoring of the supply of farm milk to third parties and the migration to other players is the responsibility of the Dutch Milk Foundation (DMF) For the operational implementation, DMF uses the facilities and expertise of the ZuivelNL, the Dutch dairy organization. DMF has its own Board, which is appointed by the Dutch Minister of Agriculture, Natural Resources and Food Quality. The Monitoring Trustee, an organisation appointed by the European Commission, will supervise the implementation of the measures imposed by the European Commission.
Information and registration
All information for dairy farmers and interested buyers of raw milk is available from the Dutch Milk Foundation in The Hague (the Netherlands).
Member dairy farmers can also consult the member website (melkweb) of FrieslandCampina and the office and field staff of FrieslandCampina’s Cooperative Affairs department.
2596 BC The Hague
Current state of affairs regarding the European Commission merger conditions
More detailed information can be found in the press release from the Dutch Milk Foundation (18 July 2017, in Dutch).