• The President of UOKiK has obliged the Mlekpol Dairy Cooperative (Spółdzielnia Mleczarska Mlekpol) to stop unfair practices against milk suppliers.
• Examples of unfair practices employed by Mlekpol include changing the price list without the supplier’s consent or reducing the price for milk during contract termination period.
• The Authority is looking into the terms of cooperation between dairy cooperatives and milk suppliers as part of several investigations.

Mlekpol Dairy Cooperative is one of the largest producers of milk and dairy products in Poland. Products of brands such as: Łaciate, Milko, Mazurski Smak, or Rolmlecz are manufactured at 13 processing plants. Mlekpol purchases milk from over 8400 suppliers who are also members of the cooperative. Cooperation is carried out on the basis of contracting agreements based on a contract template prepared by the cooperative, where the individual supplier usually does not have any influence over the contents thereof. UOKiK found that Mlekpol was forcing cooperatives to sign a contract containing provisions unfavourable to them. The prohibited practices included the possibility of unilaterally changing the milk procurement price list, including retroactively, lowering prices during the contract termination period, and hindering suppliers’ access to full information on the terms of contract performance. In addition, suppliers had to deliver milk in every case, even when it was impossible due to circumstances beyond their control.

- Mlekpol unfairly used its contractual advantage by unilaterally imposing the terms of cooperation. The contract drafted by the cooperative contained provisions unfavourable to the contractors. Such an approach did not allow building partnerships, negatively affected the stability of farmers' operating conditions, and harmed their economic interests. I have obliged Mlekpol to amend significant provisions in the contract and take corrective action," says Tomasz Chróstny President of UOKiK.

The President of UOKiK obliged the Mlekpol Dairy Cooperative to cease unfair trade practices, including by:

• the introduction of a new template contract for the supply of milk and a price list, which includes all the terms of delivery, such as the required parameters of milk quality, rules for deliveries, contractual penalties (previously scattered in various internal acts of the cooperative),
• obligation to obtain supplier consent to change the milk procurement price list and to introduce clear procedures in this regard,
• Mlekpol’s abandonment of the possibility of reducing the price paid to the supplier for milk solely because of the termination of the contract,
• exemption of the producer from the obligation to deliver milk in the event of circumstances beyond their control (e.g., animal illness, equipment failures, introduction of administrative restrictions on movement). Before the changes, only Mlekpol had the right not to collect milk in case of force majeure,
• allowing suppliers to verify milk quality tests performed by Mlekpol in a laboratory independent of Mlekpol (quality assessment has an impact on milk acceptance and price).

The cooperative avoided a fine that could have amounted to as much as 3 percent of its annual turnover, because immediately after learning of the UOKiK President’s allegations, it proposed changes to its contracts and business practices in the direction expected by the authority. It also refunded to suppliers the amounts by which it had previously reduced the prices paid to them during contract termination periods. In addition, thanks to the decision of the President of UOKiK, farmers will soon also receive interest payments from Mlekpol.

An element of the commitment is also to inform suppliers of the possibility of concluding a new contract and a new price list, amended in accordance with the requirements of the President of UOKiK.

The President of UOKiK is also currently conducting proceedings against the District Dairy Cooperative in Koło (Okręgowa Spółdzielnia Mleczarskiej w Kole). The allegations concern unfair use of contractual advantage, including the ability to unilaterally change the price list and obliging suppliers to refund a portion of the price for delivered milk if the purchaser changes. The terms of cooperation between dairy cooperatives and milk suppliers are also being verified by the President UOKiK in the course of recently initiated investigations into the practices of District Dairy Cooperatives (Okręgowe Spółdzielnie Mleczarskie) in Głubczyce, Garwolin and Jarocin.  

Entrepreneur, farmer, if you operate in the agricultural and food industry and your major counterparty abuses its competitive advantage by imposing unfavourable conditions of cooperation – report it to UOKiK. We have launched a special form to help you report any irregularities. Click here to fill it out: ankieta.uokik.gov.pl/formularz-zgloszenie-przewaga/.

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