Savencia faces termination of key agreement

Savencia, a major dairy company in France, is facing the termination of a key framework agreement by the France Milk Board (FMB) Sud-Ouest OP, an organization representing dairy producers in the southwest of the country. This marks the first time such an agreement has been terminated in the French dairy industry, signaling a significant shift in the sector's dynamics.

Termination notice sent in October

On October 16, the FMB Sud-Ouest OP, which includes 34 milk processing plants and 70 members, sent a registered letter to Savencia to terminate the two-year framework agreement. The agreement, which would have expired on October 31, 2027, is set to end early unless a new agreement is signed by October 15, 2027, to continue the business relationship.

Reasons for termination outlined

The decision to terminate the agreement follows three main reasons: Savencia's proposal to reduce milk volumes, concerns about the long-term sustainability of the Jurançon production site, and the refusal to increase the 2026 RSE (Corporate Social Responsibility) premium to reflect rising costs for members. These factors have led to tensions between the two parties.

History of disputes with Savencia

The FMB Sud-Ouest OP has previously challenged Savencia, suing the company in 2020 over disputes about milk price calculations. The parties reached an agreement in 2022, but the current termination notice suggests that the relationship remains strained. The OP has also indicated that it is open to negotiating a new contract with Savencia, though members have the option to choose other dairy processors.

Other agreements also terminated

In addition to the framework agreement with the Sud-Ouest OP, Savencia has also terminated the pricing formula agreement with the Ligerian OP Les 3 Rivières in the north of the Loire region. This agreement, signed in November 2025, will end on April 15, 2028, further signaling a broader shift in Savencia's relationships with dairy producers.

Criticism and response from OP

Anthony Daubert, president of the FMB Sud-Ouest OP, criticized Savencia for creating division in rural areas and stated that the group is actively exploring all possible solutions to recover from the current situation. This response highlights the growing dissatisfaction among dairy producers with Savencia's business practices.