Overview of a Dairy Industry Cartel and Legal Repercussions
A cattle farmer operating a roughly 100-cow dairy faced annual losses estimated between 25,000 and 35,000 euros due to a cartel among several dairy companies. For at least 13 years, these firms paid the same price for raw milk, effectively keeping a lid on earnings. The cartel, brought to light by the National Markets and Competition Commission (CNMC) and confirmed by the Audiencia Nacional last week, now risks requiring the industry to pay multi-million euro compensation to affected farmers, with about 60,000 claimants across Spain. Agricultural groups are encouraging producers to file their claims, reminding them that compensation is retroactive and can be pursued even if a farm has since ceased operations. However, claimants must await the Supreme Court’s ratification of the Audiencia Nacional’s ruling, which could take several more months.
“We are a sector that clearly illustrates the issues currently being highlighted by protests on roads across Spain,” lamented Marc Xifra, head of the dairy sector for the Unió de Pagesos union. He supports his position with historical data. In 1992 Catalonia housed 4,300 dairy farms; by 2001 that number had fallen to 1,224, and today only about 366 remain. “Being victims of that cartel undoubtedly contributed to our disappearance,” Xifra asserts.
Among the industries implicated in the agreement were Pascual, Danone, Nestlé, Lactalis, and Puleva, along with the Galician Dairy Companies Association and the Gremi d’Indústries Làcties de Catalunya. The CNMC concluded in 2015 that price-fixing occurred at the origin, but it took nine separate judgments before the 2024 Audiencia Nacional decision confirmed the outcome, notes Montse Ribot, a lawyer with Redi Advocats who has represented the case. [Source: CNMC and court records, 2015–2024]
Legal Action Against Three Retail Chains
The Catalan agricultural union also filed a competition case against three distribution chains—Mercadona, Lidl, and Bonpreu—for another practice seen as contrary to the food chain law. The concern is a suspected price-fixing scheme in their private-label brands, lasting at least four years and three months while analysts examined the behavior. Abel Peraire, a farmer and executive in the dairy sector for Unió de Pagesos, describes the situation in Catalonia where these chains account for about half of the regional market, creating a dominant position that limits farmers who are typically the weakest link in the supply chain.
Affected farmers have waited more than a year and a half for a CNMC response and do not rule out mobilizations or blocking dairy distribution centers if necessary, says Jordi Armengol, head of the farming sector within UP. [Documentation on regulatory actions and statements from unions]