Spain's largest dairy producers, including Ebro Puleva and Leche Asturiana, could face trial over an alleged EUR250m (US$387.5m) fraud against the EU's milk production quota, an industry executive told just-food today (15 May).

The Spanish high court has ordered the industry's heavyweights to testify after a government report revealed details of the alleged fraud.

The report claims that, between 1997 and 2005, 28 companies and milk cooperatives laundered 1.2m tonnes of milk over quota through "phantom" dairy producers El Churtal, Lacteos Lemos and Sumlac.

"The industry is certainly guilty and I expect a trial," said Jose Antonio Herrero Conejo, president of Federacion de Empresarios Productores de Lacteos (FEPLAC).

However, it remains unclear when a trial could begin in Spain's "slow" legal system, Herrero said. "There are a lot of lagoons and contradictions in this case," he noted.

Herrero claimed that the fraudulent activity damaged farmers who couldn't sell milk at higher prices, while the industry charged higher margins in the quota market.

According to Herrero, the Ministry should share guilt for supporting the plan. "There's no way they didn't know this was going on. It was a massive activity. They just turned a blind eye to it because Spain's quota was very small," he said.

Ebro Puleva remained guarded on the subject. "This is being reviewed and there haven't been any charges or fines," a spokeswoman told just-food.

Capsa declined to comment, as did industry lobby group Federacion Nacional de Industrial Lacteas (FENIL).