The European Milk Board (EMB) is raising the alarm: developments on the European and global milk market have reached a new level of escalation. Global milk volumes have increased significantly – and are continuing to rise. Such a surge is far beyond normal market fluctuations and is driving the sector straight towards a new severe crisis.

The current easing of Switzerland’s milk market must not detract from the fact that the structural crisis remains unsolved. From the BIG-M point of view, it is now up to the milk producers themselves to demand and adopt a clear supply management scheme, as dairies and retailers are happy to live with the surplus situation.

FAIRMËLLECH is a brand that has emerged from a movement against persistently low milk prices. Following the milk strike, Luxembourg’s milk producers joined forces and, in 2011, founded a cooperative to safeguard fair, cost-covering milk prices for its members. Today, 15 years later, the brand is carried by around 60 dairy farms in Luxembourg. It is still the milk producers themselves who hold responsibility for the cooperative and for the brand.

The Irish Creamery Milk Suppliers’ Association (ICMSA) argues that the Common Agricultural Policy (CAP) has drifted away from its original purpose: supporting food-producing farmers so they can keep affordable, high-quality food flowing to European consumers. Instead of trying to make CAP carry both food security and environmental policy, ICMSA calls for CAP to return to meaningful direct support for active farmers, with environmental objectives funded separately through a Common Environmental Policy.

All contracts are not worth talking about but those that guarantee a price that truly covers production costs, include review clauses and define supply volumes and duration can strengthen the position of producers. The limits of the EGAlim law in France (designed to balance commercial relationships between agricultural producers, processors, and retailers), nonetheless, show that a contract-based system remains imperfect: complex calculation formulas, undervalued costs and the growing disparity among producers demand keen vigilance.

Farmers’ organisations are outraged: the EU Commission has unconditionally approved the merger of Arla and DMK, thus paving the way for Europe’s largest dairy cooperative. AbL and MEG Milch Board criticise the failure to take the farmers’ concerns into account, and are now demanding detailed monitoring and evaluation of the consequences for milk suppliers.

The EU competition authority has approved the merger of Arla and DMK, thus paving the way for Europe’s largest dairy cooperative. The family farmers’ organisation AbL (Arbeitsgemeinschaft bäuerliche Landwirtschaft) and MEG Milch Board are highly critical of the merger and had submitted an official statement to the EU authority. In it, they demanded that if approval is given, this should be subject to certain conditions to strengthen the market position of dairy farmers in the new Arla. Cooperatives organised along the lines of big business meanwhile tend to bypass the interests of their members, which is something that should be given special attention in the case of mergers. The critical aspects brought forth by the two farmers’ organisations on behalf of the many suppliers of the new Arla in Germany have been ignored by the competition authority. In its special report, the German Monopolies Commission also pointed out that increasing concentration among dairies is one cause for the ever-wider price gap between farmers and consumers. 

“We are absolutely outraged that there has been obviously so little consideration given to the farmers’ concerns and that the merger has been waved through without any in-depth review”, says Claudia Gerster, AbL Federal Chairwoman. “The legal statement submitted by the two farmers’ organisations illustrates how the merger threatens to diminish transparency from the farmers’ point of view, because the higher profits that have been announced will also be generated in subsidiaries that are not part of the cooperative, so that there are no insights. “How is the cooperative farmers’ body in the representatives’ meeting supposed to vote on pricing issues when it doesn’t have all the information?”, Gerster wonders. 

The statement for AbL and MEG Milch Board was drawn up pro bono by agricultural expert Marita Wiggerthale, assisted by lawyer Kim Künstner. The farmers’ organisations were recognised as third parties. “In our opinion, the EU Commission must monitor and evaluate the repercussions that the merger will have on the suppliers”, demands Gerster. “And we’re now going to call on the EU authority to do just that. Our detailed legal report offers many important starting points for such an evaluation, as seen by the farmers.”

The special report by the Monopolies Commission, an independent advisory body of the German federal government, also proposes an ex-post evaluation for mergers in the dairy sector. “This can and must make the pricing processes of large cooperative structures more transparent”, says Frank Lenz, Chairman of MEG Milch Board.

This is illustrated by just one of numerous practical examples from the legal report of the farmers’ organisations: through its subsidiary Arla Food Ingredients, the Arla Food Group generates high added value with protein drinks that are currently in great demand, as reflected in increasing sales. These drinks are made with whey, which can in turn be supplied by DMK. It sounds plausible. But sales at Arla Food Ingredients saw strong growth in 2025/26, from 547 million to 639 million euros, while at the same time, Arla suppliers experienced a farm-gate price crisis. Many such practical examples show that there is a total lack of adequate information about whether and how profits from cooperative milk are being passed on. Nor is it clear who bears the risks if, for example, newly built drying towers are not being used to capacity, which means that they are not financially viable. Costs such as increasing energy prices or milk transport costs are passed on to the producers, as shown by a complaint lodged with the BLE (Federal Office for Agriculture and Food) in 2021. The dairy had reduced the advance payments by 1 cent per kg from September 2021 to offset increased costs incurred by Arla Foods for fuel, energy and packaging.

The gist of the arguments given in the EU competition authority’s approval was that the new Arla was unlikely to exploit its market power over its suppliers, as they could change dairy. But precisely this argument was adequately shown to be wrong in the statement from the two farmers’ organisations. “It can be presumed that in Lower Saxony at least, there will scarcely be any opportunity for DMK suppliers to change dairy following the take-over by Arla”, says Ottmar Ilchmann, AbL Chairperson in Lower Saxony. The 18 dairies that exist alongside DMK in Lower Saxony may offer an alternative in theory, but they have scarcely any spare capacities for processing more milk and are thus not in a position to accept many new members, if any at all. “What’s more”, Ilchmann continues, “some of these dairies have financial ties with DMK, for example through raw material supply contracts.”

For the farmers, what matters now is that the EU competition authority monitors and evaluates the impact that the merger will have on the market development for dairy farmers. AbL and MEG Milch Board continue to demand this, and to this end they are making their statement available in the public sphere. Furthermore, it is now all the more important that the German government allows no exemptions in Germany when implementing the EU-wide contractual obligation in order to strengthen the position of dairy farmers also in the new Arla, thus ensuring profitable remuneration of valuable farming work.

On behalf of AbL and MEG Milch Board: Berit Thomsen, AbL expert for livestock farming and market policy