The Lower Austrian Farmers' Association has filed a complaint against SPAR with the Austrian Competition Authority. The government must now investigate whether the supermarket chain is abusing its market power to the detriment of dairy cooperatives and dairy farmers.
The Austrian dairy farmers, represented by their umbrella organization NÖM, decided last week to temporarily stop delivering milk to Spar. The stocks will probably run out soon. The reason for this boycott is the stalled price negotiations.
With a market share of over 30 percent, Spar has considerable market power in the Austrian food retail trade. The second-largest dairy and the largest supermarket chain still cannot agree on a higher milk price. Other Austrian supermarkets have agreed to this.
NÖM represents the interests of over 2,000 dairy farmers who are demanding compensation for their additional costs. The retail group, on the other hand, takes the position that it has no understanding for the requested increase and therefore does not want to pay it.
According to Austrian dairy farmers, the current rates are no longer compensatory to cover the rising costs of production, such as energy and feed. NÖM is therefore demanding an increase, while Spar indicated that this would lead to unacceptable price increases for consumers.
It is estimated that hundreds of dairy farmers are involved in the boycott. Together they normally supply a large part of their milk production to Spar. The Austrian Farmers' Union (LKÖ) has declared its solidarity with the farmers and says that they cannot survive without fair compensation.
While Spar is sticking to its guns, other supermarket chains in Austria have declared themselves willing to agree to the new prices. This ensures that the farmers' dairy products end up on the shelves of other stores, making Spar the only supermarket affected by the supply stop.
Although Spar is trying to find alternatives for the missing dairy products, the chain is experiencing inconvenience from the action. Both the farmers and the supermarket chain are keeping the door open for further negotiations.