French dairy processor Entremont Alliance is eyeing consolidation to alleviate the impact of the slump in global prices for powdered milk and butter and what it claims are high domestic farm-gate prices.

“We are keeping an open mind on what form this consolidation could take – be it a partnership, joint venture or capital stake  – and are only at the stage of  testing the waters,” a spokesman for Entremont Alliance told just-food today (17 June).  

The spokesman went on to rubbish reports in the French press that the company was on the verge of bankruptcy.

“There is no truth in this. We made an operating loss of around EUR10m (US$13.9m) in the first quarter of 2009 but this was directly due to the (high) milk prices we paid. We expect to report a break-even position at the end of the first half of 2009 as milk prices in the second quarter have come down even though they remain at an unacceptable level. ” 

He played down any suggestion that Entremont Alliance was refusing to adhere to the recently-signed agreement with dairy farmers on milk prices.

“Our objective is to respect this agreement but if market conditions worsen it will be increasingly difficult to do so. This agreement has simply ushered in a ‘politically correct” price for milk and not one which reflects market trends.”