The EU has decided to scrap restitutions on dairy exports, a move that has led to the end of subsidies on the shipments of dairy products.
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Announcing the decision, the European Commission blamed “extraordinary market conditions” in the EU and on the wider world market.
The move will see refunds on the exports of butter and cheese from the EU abolished. This follows similar moves on skimmed milk powder, whole milk powder and condensed milk in the last year.
The Commission said prices for skimmed milk powder in the EU are double the level seen in 2003 when the Common Agricultural Policy (CAP) was reformed. Butter prices are 30% higher than in 2003.
Danish dairy giant Arla Foods said today (15 June) that the end of export subsidies will force it to increase its prices.
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By GlobalData“We’re not surprised about this decision, but it obviously means a considerable loss for us,” said Arla Foods’ Vice CEO Andreas Lundby. “We’re left with one choice, which is to increase prices immediately.”
Lundby acknowledged the rise in world market prices for dairy products but said: “The trend in prices doesn’t make up for the loss of export subsidies.”
