Pressure from farmers is keeping the price of milk high in France, leading to demand for cheaper imports and lower profits at cheese maker Bongrain, the company has told just-food.
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Bongrain, the company behind soft cheese brands including Caprice des Dieux and Coeur du Lion, last week (27 August) reported a slump in half-year profits and warned that weak consumer demand meant it could not issue forecasts for 2009.
Although first-half profits and sales were down, the group said it had been able to gain share in parts of the French cheese market and across the border in Germany thanks in part to the launch of cut-price products.
A spokesperson for Bongrain said the company had taken leadership of the ripened soft cheese category in France from rival Lactalis.
However, she admitted that pressure from French farmers meant the company’s milk costs remained high and consumers were demanding cheaper imports from abroad.
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By GlobalData“Milk prices are a big, big pain in the ass,” the Bongrain spokesperson said. “Prices are much higher – around 20% higher – in France than in the rest of Europe. The amount of imports has increased by 60% in the last six months.”
This summer, French farmers have picketed dairy processors and retailers across the country in a bid to win an increase in the price they receive for their milk.
An agreement was reached in June that left French dairy processors paying more than their counterparts in Germany and the Netherlands.
The Bongrain spokesperson refused to be drawn on whether the company expected annual profits to come in lower this year.
However, she said that while Bongrain’s half-year earnings were hit by weak consumer demand, its bottom line was also reduced by a series of one-off costs.
The charges were linked to the sale of Bongrain’s UHT milk production facilities in Derval and the closure of its Paul Renard cheese-making plant in Flony La Chapelle.
