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Commitments by ZuivelNL to ACM: dairy farmers get better insight into the spending of contributions

Following an investigation by the Netherlands Authority for Consumers and Markets (ACM), Dutch sector organization ZuivelNL has made commitments to use the dairy farmers’ monthly contributions only for activities that are related to the sale of milk and not for other activities. In addition, ZuivelNL will better explain what the contribution is spent on. ACM sees the improved transparency of ZuivelNL as a boost to the dairy farmers’ position vis-à-vis their buyers, as ZuivelNL’s commitment will take away the risk that dairy farmers pay for something that is unrelated to the sale of milk.

Investigation following complaints filed by dairy farmers

ACM launched an investigation following a complaint filed by an association of dairy farmers (supplier association Leerdammer Collectief, or LVLC) about the contribution payment that they pay ZuivelNL through their buyer. According to LVLC, this payment is unrelated to the sale of milk. This is prohibited under the Dutch Act regarding unfair trading practices in the agricultural and food supply chain (in Dutch: Wet oneerlijke handelspraktijken landbouw en voedselvoorzieningsketen, or Wet OHP Landbouw). With its commitment, ZuivelNL complies with the rules laid down in this act. This act aims to strengthen the position of farmers, fishermen, and growers within the production chain. ACM has not established that ZuivelNL violated this act.

Contribution payments to ZuivelNL

ZuivelNL is the trade association for the Dutch dairy industry, co-founded by the Dutch Dairy Association (NZO). Dairy farmers that supply buyers that are members of NZO pay ZuivelNL a contribution each month. Buyers (such as Royal Lactalis Leerdammer and FrieslandCampina) charge all of their dairy farmers this contribution. The amount of the contribution is connected to the amount of milk that the dairy farmer supplies and that the dairy processor buys. The buyers themselves, too, pay a contribution to ZuivelNL. ZuivelNL uses these contributions for various activities, such as research, food safety, and animal welfare.

Payments related to the sale of milk

Under the Dutch Act regarding unfair trading practices in the agricultural and food supply chain, milk buyers are prohibited from charging suppliers payments that are not related to the sale of milk. Dairy processors that are members of NZO charge their dairy farmers the contribution by order of ZuivelNL. ZuivelNL has now committed to using the contribution paid by dairy farmers only for activities that are directly related to the sale of milk, and that the contributions brought in by them will benefit the dairy farmers. ZuivelNL will provide insight to dairy farmers into what they pay for. Through the members of ZuivelNL in which they are represented, dairy farmers can influence the amount of the contribution. ZuivelNL has committed to reviewing the amount of the contribution every three years, so that it remains in line with the Dutch Act regarding unfair trading practices in the agricultural and food supply chain.

ACM will monitor whether ZuivelNL complies with its commitment. ACM expects that ZuivelNL will continue to collect the contribution in a way that is in line with the aforementioned act, even after the duration of the decision.

The Dutch Act regarding unfair trading practices in the agricultural and food supply chain

This act is aimed at strengthening the positions of farmers, growers, and fishermen vis-à-vis larger and more-concentrated market participants. In addition to payments that are unrelated to the sale of products, more unfair trading practices have been included in the Act.

If you as a supplier see that your buyer does not comply with the rules, please contact ACM and file a report.

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