Parmalat South Africa recently increased the price it pays to members of the SA Milk Cooperative (Samilco) by 15c a litre. Samilco supplies more than 90% of the company’s milk, which translates into more than 400 million litres of milk annually. “Parmalat’s increase is one of the highest presented by all the milk buyers.
Samilco farmers, although they are not satisfied with the increase, are extremely grateful,” said Samilco manager André van Heerden.
Parmalat CEO Theo Hendrickse said the price increase is aimed at helping to alleviate some of the financial burden that dairy farmers are currently experiencing due to the rising costs of feed, fertiliser, fuel and wages. According to Van Heerden, last year Parmalat said it was going to raise the price it paid to farmers but never did.
He said farmers are actually only receiving 5c more than at the start of last year. Hendrickse believes the price increase is reasonable. “Prices were not increased last year as the year-on-year inflation rate for dairy products is only 3,92% compared to that in the total food category of 7,14% over the same period. Within the basket of dairy products, some sub categories such as UHT milk even realised a price deflation,” he said.
Solva Burger, Parmalat’s head of stakeholder relations, said the price increase had nothing to do with the Competition Commission’s referral of allegations of anti-competitive practices against the company to the Competition Tribunal. – Glenneis Erasmus
