In a year the price will then climbed 30

April 12, 2012 12:00 AM
In a year the price will then climbed 30

Lactalis, number one European cheese, known especially for its President, company brands, Bridel, investors, is preparing to raise strongly his prices to cope with soaring prices of milk, announces its operational pattern, Michel Léonard, in an interview with the "echoes". He also a call of the foot Sodiaal and PAI Partners, the co-owners of Yoplait. A reconciliation between the two groups would be "a very beautiful transaction", provides Michel Léonard.

The prices of agricultural raw materials, including milk, fly. What is the impact on Lactalis

Raw materials increased substantially since almost a year. The reasons are many, but the result is an insufficient supply to demand. Missing 2 milk in the world, including 1 in Europe, which may seem low, but the consequences are enormous. All industrial look of milk. Result, the price package. Since October 1, we pay 20 more milk we buy to the producers. And a new increase is expected early next year. In a year, the price will then climbed 30. In neighbouring countries, it is worse. However the raw material is quite essential for us and extremely weighs heavy in cost. In the case of the emmenthal, milk represents 80 of the cost of production. As a result, we have decided to increase our prices of 15 to 17 in early December, after a first increase of 2.5 this summer. These are significant increases, but they do that cover the increase in our raw material in 2007. Not that provided for in early 2008.

This shortage you is it sustainable

Considering a small rebalancing from autumn 2008, but we believe that the demand for dairy products will remain permanently over the offer and take the prices. However, it is impossible today to calculate the impact it will have on the consumer. Because, if distributors are an effort on the rear margins, prices for clients will rise less strongly. We will do everything so that the eventual decline in volumes is as low as possible. For the moment, as a part of the rear margins has been made to clients, our final prices remained stable. Some have even declined.

May the margins of the Group fall

This year, we slightly increased our sales volume while increasing reasonably price. In view of the lack of milk, we at the same time had to make tradeoffs. To promote our brands, we have for example produced a little less powder milk. And we will maintain our margins if our increases in price of 15 to 17 are accepted and it should be by the distribution. In summary, the end of the year is likely to be tense and the beginning of 2008 promises to be sports.

In the space of three years, you made your sales of 5 billion to EUR 9 billion. You reach the critical size

In France, it is now leader of the cheese, leader of the collection of milk, is moving to Candia in large drinking milk... It clearly crossed a walk these past three years, including the acquisition of the Galbani mozzarella. This year, we bought the Croatian leader of ultra-fresh, a case of pressed paste in Czech Republic and taken control of the ultra-frais pole of Nestlé, known particularly for the dairy brand. But, if it can still grow, it will. Overall, we have the critical size, but, here or there, can be strengthened.

Could you buy Yoplait, for example, if PAI Partners disengages

This would indeed be a very good transaction, in the interest of everyone. There are beautiful complementarities and this would pose no problem from the point of view of competition regulations. In the yoghurt and the ultra-fresh in General, Yoplait has 10 of the French market. Lactalis marks weigh much. With the brands, our share rises to 20. But Danone, he controls 33 percent of the market. However, PAI Partners has not developed its 50 in sales. In addition, Sodiaal has a right of first refusal for participation and wished to seems to exercise it. The ball is in his camp.

Sodiaal search for financial partners for this operation. Could you be a part

Clearly not.

You are also candidate for purchase Boursin, marketed by Unilever...

It is a beautiful brand with a very good profitability. But it is primarily French and its development potential is limited, so Unilever has handled it very offensive manner. In addition, the mentioned price, EUR 350 million, is very high. Beyond that, it would be too expensive. There are other candidates and we do not intend to play one-upmanship.

How is the integration of the ultra-frais pole of Nestlé

The Nestlé transaction, it is the addition of skills. They brought trademarks: the dairy, slimness, Yoco, Fruttolo, Munch Bunch, skiing. We made our way of management, our ability to saturate the industrial tools, in a system where the margins are narrow. We are at the controls. Market share remained unchanged for the moment, but we have the keys since the end of 2006. We are the priorities. The dairy is part. We also redid of television advertising for its classic yogurt this summer, for the first time for years. Conversely, Bridélice will disappear for everything cream dessert. Another adjustment, we have added the Nestlé signature on our product BA and it sells better. On the industrial level, closed a plant of about 30 employees at Longueville near Rouen, and another 130 employees in Cuddington, to the United Kingdom. In total, need us two or three years to develop and better return on this set.