Danish Minister: Arla abusing market status

- Last updated on GMT

Related tags: Arla foods, Denmark

Arla Foods is the largest company in the Danish milk sector. It has
a 93 per cent share of the market. But The Danish Business
Minister, Bendt Bendten, believes that Arla Foods should dismantle
the monopoly that it holds on the Danish milk market.

The Minister plans to stop Arla Food's ability to bind milk producers to the company by forcing long notice periods to farmers that wish to leave the co-operative. At present Arla is able to bind milk producers to a 25 month notice requirement before they leave the dairy group. But the Minister has proposed that in the future only a 15 month notice requirement will be needed, thus giving the producers more freedom to choose a competing supplier.

Further to this, dairy farmers will be entitled €12,000 refund of their stake in the co-operativen if they opt to leave Arla Foods.

The Minister's proposals follow the discovery that Arla Foods issued penalty fines to farmers that breached the contract with the company. This is being investigated and initiatives are being set up to insure that Danish farmers have alternatives suppliers to sell to.

Related topics: Markets, Arla Foods

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