To the anger of German dairy farmers, two dairy cooperatives have made new price agreements with the supermarket chain Aldi regarding lower butter prices. By doing so, Aldi breaks previous price agreements made before the conclusion of the annual official price negotiations.
A few weeks ago, Aldi-Nord proposed a significant reduction in the price of butter. Dissatisfied farmers then took to the streets and blocked several Aldi distribution centers. The strike ended with a promise of a joint search for a solution. German dairy farmers thought that would temporarily ease tensions.
Now Aldi Nord has agreed with two dairy factories on a butter price that is 56 cents lower. Butter prices are rising worldwide, but Aldi is selling butter at dumped prices, according to the current accusations. This frustrates not only farmers but also other German dairy companies.
A spokesperson for the German farmers and rural movement accuses Aldi of breaking its word. “The low butter prices that Aldi negotiated with some dairy farms are a slap in the face for the dairy farmers,” says Uta von Schmidt-Kühl.
These dissatisfied German farmers have organized large demonstrations and blockades over the past weeks, receiving support even from Agriculture Minister Julia Klöckner. She too believes supermarkets should stop undercutting food prices and that stores should stock more German food products.
In response, Aldi states that it is very common that after the Christmas and New Year holidays the demand for butter, cheese, and dairy decreases, leading to lower prices when demand drops. Aldi also turns the argument back at the dairy farmers by pointing out that they are aware of this year-end fluctuation yet continue to supply large amounts of milk nonetheless.
This may be the point at which politics needs to intervene in the free market economy. “To find solutions, all market partners must sit around one table. We need long-term strategies,” said a German state minister.
A video conference with farmers, dairy processors, traders, and supermarkets was actually scheduled for January 13. The farmers are not letting this go, announced LsV spokesperson Lee. Next time, apparently, we should block warehouses not for two days but for two weeks, it was said.
Also in the Netherlands, supermarkets and purchasing organizations seem unable to avoid this issue any longer. On Thursday, January 14, Dutch agricultural organizations, at the initiative of the supermarkets, will meet to discuss the growing dissatisfaction among farmers and growers. They have long struggled against the dominant position of buyers.
A 2019 study by the Dutch General Audit Chamber showed that between one-third and one-half of farmers live below the poverty line. The situation is similar in other European countries. There, too, farmers are increasing pressure on supermarkets.