French milk producers are preparing to stage demonstrations throughout the country tomorrow (7 November) in protest against the latest price cut proposals put forward by French dairy processors.

Trade federation the FNPL and dairy companies have hit deadlock in pricing negotiations, with the FNPL - representing the farmers - staunchly opposing price cut proposals.

The dairy processors body, ATLA, has offered to limit fourth-quarter price cuts to around 9%, or EUR30 (US$38.2) per 1,000 litres. Initially, dairies had proposed reductions of between 12% and 20%.

Additionally, for the first quarter of 2009 ATLA's members agreed that they would not lower prices by more than EUR55 per 1,000 litres, or 15%. Previously, dairy companies had pushed for cuts of 27% to 32%.

Despite these concessions, the new proposals continue to fall short of the FNPL's demands for cuts of no more than EUR10 per 1,000 in Q4 2008 and of EUR20 in Q1 2009.    

Speaking to just-food today, one dairy processor blamed the dispute on France's General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF), which has forbidden producers and processors to discuss price levels since April. According to new DGCCRF regulations this would constitute an illegal and restrictive practice.

This policy, sources at the dairy group said, meant that there has been no "real dialogue" between the parties on the economic situation over the past six months.