The Spanish dairy sector is facing a sharpened competitiveness challenge as imports surge. Fenil, the national dairy industry association, notes that the growth of imports has been dramatic in recent months. In the first half of the year, import volumes pulverized all existing records, according to Fenil, with customs data showing no sign of a slowdown. The trend comes as producers wrestle with higher costs and a market dominated by cheaper foreign products. The sentiment among industry executives is cautious: a combination of price pressures, supply chain disruption, and currency dynamics is reshaping the dairy landscape across Spain.
Fenil cites data from the Interprofessional Dairy (Inlac)—an alliance of farmers, cooperatives, and industries—that for 18 months has shown raw material prices above the EU average when evaluated on the solids content of milk, namely fat and protein. The organization emphasizes that the Spanish milk supply shows lower solids than much of Europe, a difference that does not compromise milk quality but does limit the amount of finished dairy products that can be produced from each liter. Climate and feeding practices, varying by region, help explain this composition gap across Europe.
With prices at the origin still higher than their European peers, by roughly 10% above the EU average according to Ecoagrasoc, the incentive to import grows. The effect is strongest on transformed dairy goods such as yogurt, powdered milk, and especially cheese, products that travel more easily across borders than liquid milk. The combination of higher farm prices and structural differences in milk composition contributes to a steady flow of imports into the Spanish market.
Industry insiders say this pattern of diminished competitiveness impacts primarily cheeses made from cow’s milk or blends, which are increasingly displaced from shop shelves by cheaper imported varieties. The shift in consumer choices and retailer assortments intensifies the pressure on domestic producers to adapt or risk erosion of market share.
In the cheese category—the segment with the largest import growth—penetration from foreign products rose notably during 2020–2023, climbing from about 305,000 tonnes to 363,000 tonnes. In the first half of 2024, the trend accelerated again, with a year-on-year increase of around 14.4%, following a record period the previous year. These figures illustrate the ongoing challenge local dairies face in competing with cheaper imports in a category that is a key gateway for international product entry.
Data from the Tax Agency corroborate the substantial import volumes of dairy ingredients, such as powdered milk, used by other food manufacturers in pastries, biscuits, ice creams, and related sectors. This broad import base underscores the market-wide impact of international supply chains on domestic processing industries, beyond fresh dairy products alone.
Industry analysis shows that while overall dairy consumption in Spain continues to grow, it does so at a single-digit pace, about 6.3% across the last two years, according to Ecoagrasoc. The double-digit rise in imports contrasts with this slower consumer growth, indicating a structural shift in how dairy is sourced and used within the economy, including its role in food manufacturing and gastronomy.
Looking at the trade balance, imports approached 900,000 tonnes in 2023, while dairy exports barely surpassed 500,000 tonnes. This gap highlights a persistent imbalance that stakeholders say calls for strategic responses from the industry and policymakers alike to promote competitiveness and value-added production at home.
Luis Calabozo, the director-general of Fenil, described the combination of high input costs and a supermarket price war as an ‘economic sandwich’ that compresses margins for dairy companies, particularly small and medium-sized enterprises, threatening profitability in the medium term. Fenil also accuses some retailers of using the sale price of long-life liquid milk (UHT) as a promotional draw that erodes margins for domestic producers.
Industry observers note that the current dynamic requires coordinated actions to address input costs, improve efficiency, and diversify product offerings. The sector remains watched closely by policy-makers and industry groups who seek to preserve competitiveness while ensuring a stable supply of high-quality dairy products for Spanish and European consumers.
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