Emmanuel Besnier, patron du leader mondial des produits laitiers, Lactalis, a expliqué à Boston jeudi 5 mai : « Il y a une crise sur tous les coûts de production, qu

Lactalis avertit distributeurs et consommateurs: il va répercuter en rayons la très forte hausse de ses coûts de production

The French Lactalis, world leader in dairy products, presented yesterday Thursday, May 5 its annual results from Boston, in the United States. Need we remind you, the French agrifood giant is a multinational with 85,5000 employees operating worldwide (52 countries) with some 270 sites.

“There is a crisis in production costs” (+3 billion more)

The central theme emerging from this presentation of results was the “production cost crisis”. The boss of Lactalis, Emmanuel Besnier, has indeed explained that the increase in prices paid to breedersthe explosion of plastic costs (packaging) or the difficulties of transportwould cause an increase in its expenses of around 15% this yearand that this will have consequences on the prices on the shelves.

“There is a crisis in all production costs, whether raw materialsof the’packagingof the logisticswhich we have to pass on to consumers, ”explains to AFP the boss of the family group, Emmanuel Besnier, on the occasion of the presentation of the annual results.

Lactalis, the world’s leading dairy group with the President, Galbani and Parmalat brands in particular, saw a significant increase in its costs in the second half of 2021 and provides for a total of 3 billion euros in additional charges.

Fertilizers, food… the war in Ukraine has increased the costs of breeders

The average price of milk paid by Lactalis to breeders across all of its sites worldwide has already increased by 4.7% in 2021. In France alone, it increased by 5% to 382 euros per thousand litres.

It has risen even more since the beginning of the year with the war in Ukraine, which in particular has caused the costs of breeders to soar, from fertilizer to feed.

Food manufacturers, who had concluded an agreement on March 1 with distributors providing for a 3% increase in the prices of many products sold to supermarkets, are again at the negotiating table so that they are taken into account the latest increases in production costs.

Food prices: the government proposes a framework for the resumption of negotiations between large retailers and manufacturers

Faced with the probable rise in prices on the shelves, “we are aware that there will surely be a problem of arbitration of certain consumers concerning their purchases”, underlines Mr. Besnier.

After the upheavals linked to the pandemic in 2020, “we were hoping for a return to normal, with ups and downs, in 2021”explains Thierry Clément, the director of operations.

The world “did not restart” as expected

But the world “did not restart” as expected, between supply disruptions, lack of containers to transport products, etc., and prices started to climb from the summer.

“The differences between our selling prices and purchase prices were strongly negative from the end of 2021”, he indicates.

the turnover of the group, supported in particular by the integration at the end of the year of Leerdammer cheeses in the Netherlands and Kraft in the United States, increased by 4.2%to 22 billion euros.

But the company was unable to immediately pass on increased costs to customers and its operating profit fell slightly, to 1.17 billion euros. Net profit increased by 4% to 445 million euros.

Lactalis would eye some assets of Danone

During the presentation of his 2021 annual results, Emmanuel Besnier was also asked about the rumors of the acquisition of his competitor Danone, an even more imposing giant (en 2021, its turnover had reached 24 billion euros, up 3.4%). Emmanuel Besnier did not want to expand on the subject, he just conceded lip service that he could “perhaps take an interest in Danone as part of a review of its portfolio” and thus show his interest in certain brands, but not enough to launch a takeover bid on the group…

This market rumor had started on Wednesday April 20, the Letter A having reported that the agri-food group Lactalis would consider a partial or total takeover of its competitor Danone (which had undoubtedly contributed to the jump in Danone shares that day, by 8.65% at the end of the morning, even if the announcement of better-than-expected turnover in the first quarter and the annual objectives maintained by the agrifood giant also had something to do with it…).

However, reacting to this rumor from La Lettre A, Antoine de Saint-Affrique, the new general manager of Danone appointed last September, assured on Tuesday April 26 during the annual meeting of shareholders, that the French agri-food group does not did not plan to sell any of its three businesses (dairy and plant-based products, infant formula and bottled water).

“Our portfolio of categories is growing because it is in line with consumer expectations. We have no intention of parting with it, regardless of the rumours,” said Saint-Affrique.

However, despite these denials, the article published on April 20 in the economic newspaper The letter a indicates that the unlisted French dairy company Lactalis had been studying for months a possible total or partial takeover of Danone. And that Danone would have commissioned the CEO of Rothschild, Olivier Pécoux, to look into the matter.

“Advisor to Lactalis, Perella Weinberg Partners is considering scenarios for the partial or total takeover of Danone. The operation would be complex for Emmanuel Besnier’s group, which has a turnover lower than that of the agri-food giant. On the side of Danone, Olivier Pécoux, CEO of Rothschild in Paris, is in charge. “, wrote The Letter A on April 20.

(with AFP and Reuters)