Colruyt Group is aiming for a transparent stable milk price
Working towards cooperation with partner Inex and its dairy farmers: long-term, stable business model for all partners in the chain
Halle, 21 February 2019 - Colruyt Group aims to offer dairy farmers a stable and transparent milk price, and partners up with Inex. Dairy farmers affiliated to Inex were presented a proposal today to sign up for this partnership to receive a transparent and stable price of 34.76 cents/litre for a specific percentage of their milk volume. This way, they can count on a fixed sales volume and a revenue guarantee for a period of five consecutive years. In this way, Colruyt Group wants to achieve a long-term and stable business model for all players in the Belgian chain. If sufficient dairy farmers register, the first products (marketed under the Boni Selection flag) will be available in Colruyt Group's food stores from April 2020.
A stable, transparent milk price for dairy farmers
The Belgian milk sector is often subject to fluctuating prices. In order to provide greater transparency in the chain and help Belgian dairy farmers to earn a more stable income, Colruyt Group and Inex are joining forces. Specifically, the partners agreed to enter into a five-year partnership, with a fixed, transparent price of 34.76 cents/litre for the dairy farmer. This proposal was presented to the 450 dairy farmers affiliated to Inex today. They now have six weeks to sign up for a percentage between 15% and 30% of their volume.
The defined milk price was determined after an intense exercise in which very specific figures from different dairy farmers were examined over a lengthy period. Moreover, these individual figures were closely compared to publicly available figures. Stefan Goethaert, General Manager Fine Food, Private Label and Retail Services at Colruyt Group, and responsible for the group's agricultural policy, adds: “For us, the reason for a stable price is to ensure that dairy farmers have a fixed income and that they can invest. We spent a long time arriving on calculating a price that in our opinion, meets those needs".
New production line for Boni Selection milk products
If sufficient dairy farmers sign up for the project, Inex will invest in a new production line especially for this purpose, which will be used as efficiently as possible to cope with the capacity. Stefan Goethaert says: “We chose Inex because they have been a Belgian partner for many years, and they have the positive will to contribute to the project. They share the same vision and objectives. We are very much looking forward to further constructive cooperation and hope that all dairy farmers will sign up".
The partnership will cover most of the Boni Selection milk products (available from the group's various food outlets), with this partnership clearly visible on the packaging. The first products should be available in the shops in April 2020, and that is when the fixed milk price agreed with the dairy farmers will take effect.
The price for dairy farmers will remain the same for five years, with prices in the shops following existing market prices. “At Colruyt Group, there is a clear demarcation between the purchase price and the sales price: what we pay to our suppliers is not linked to what the customer pays in the store," says Stefan Goethaert.
New milestone in Colruyt Group’s agricultural policy
This initiative also fits in with Colruyt Group's ambition to work as much as possible with Belgian suppliers and to continue to provide constructive support to the chain. “We are aware of the challenges facing the sector. As the only Belgian retailer left, we want to support and stimulate the local economy and agriculture in particular, by ensuring that the high volatility for the farmer is under control. Through this creation of transparency and partnership, we want to further build trust with the sector. By the way, we are still one of the only retailers that provisions itself with 100% Belgian milk," adds Stefan Goethaert.
Colruyt Group has always been active and constructive within the Federal Consultation Chain and has shown its commitment by participating in various support mechanisms. Stefan Goethaert concludes: "As a retailer, we are the last link in the chain, before the consumer. We therefore have a good idea of what the consumer wants: as a retailer, we want to meet our social responsibility goals in order to respond to this in the most sustainable way possible. Through such cooperation we can meet the customer's demand for a product that clearly shows that dairy farmers receive a transparent, stable price for their products".
For more information/in case of questions, please contact Press Office Colruyt Group: press officer Hanne Poppe (NL) and Nathalie Roisin (FR) via email@example.com / 0473 92 45 10 (NL) and 0497 42 53 04 (FR)
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Colruyt Group operates in the food and non-food distribution sector in Belgium, France and Luxembourg with approximately 570 own stores and 580 affiliated stores. In Belgium this includes Colruyt, OKay, Bio-Planet, Cru, Dreamland, Dreambaby and the affiliated stores Spar and Spar Compact. In France, in addition to Colruyt stores, there are also affiliated Coccinelle, Coccimarket and Panier Sympa stores. The group is also actively involved in the foodservice business (supply of food products to hospitals, company canteens and catering businesses) in Belgium (Solucious). The other activities comprise the sale of fuel in Belgium (DATS 24), printing and document management solutions (Symeta) and the production of green energy (Eoly). The group employs over 29.900 employees and recorded a EUR 9,4 billion revenue in 2018/19. Colruyt is listed on NYSE Euronext Brussels (COLR) under ISIN code BE0974256852.