Retailers offer German dairy farmers a pay hike (Roundup)

Jun 4, 2008, 21:49 GMT

Berlin - A leading German supermarket chain said Wednesday it would boost the retail price of milk, eight days after German farmers cut off milk supplies in a protest at falling incomes.

The decision was the first sign of success for the farmers involved in the conflict, which has spilled over into other European nations as well.

Lidl, a discount grocer, said it would increase the sale price of milk by 10 euro cents (15 dollar cents) per litre from Monday. Another leading grocer, Rewe, said it expected to follow suit.

Romuald Schaber, president of the BDM association of German dairy farmers, said the refusal to supply milk to dairy factories would continue while farmers waited to see the result of talks with the milk-processing industry on a new pricing system.

The BDM said thousands of farmers from Germany, Belgium and the Netherlands would gather Thursday at Berlin's Brandenburg Gate for a protest rally.

On Wednesday, dairy farmers had shifted their demonstrations from milk-processing plants to the offices of the grocery chains, which they blame for low milk prices in Europe's biggest economy.

Protesters picketed the headquarters of Lidl and Aldi, the leading discount grocers, as well as the head office of Edeka, Germany's biggest regular-price grocer.

The German Cartel Office began an inquiry that may end in a huge fine for the BDM for breaking a German law that outlaws economic boycotts.

After legal advice, the BDM had to advise radical farmers on Tuesday to end several days of picketing which had prevented milk supplies from non-striking farms being taken to factories for processing.

The HDE national retail federation said milk and yoghurt were once again moving out to shops, despite claims by farm leaders that 70 to 80 per cent of milk from Germany's cows was being dumped onto fields or into drains and feed troughs.