Lithuanian dairy sector urges rejection of proposed "Milk Law"

Lithuanian market players are calling on the Seimas (parliament) to reject the government's proposed "Milk Law," arguing that it fails to incorporate their concerns and risks creating over-regulation and stifling competition. Several key agricultural associations, including the Lithuanian Association of Agricultural Cooperatives "Kooperacijos kelias," the Lithuanian Dairy Association "Pieno centras," and the Lithuanian Milk Producers Association, have submitted 37 comments and proposals regarding the draft law on prohibiting unfair trade practices in the dairy sector.

According to the associations, 36 of their 37 proposals were disregarded, with only one being withdrawn. They contend that the proposed regulations, which address pricing rules, limits on bonuses and premiums, dual responsibility, milk quality testing, and competition assessments, are either too vague or overly restrictive. A particular point of contention is the proposed 20% cap on bonuses and premiums, which the industry argues does not reflect market practices and discourages the production of higher-quality milk. They advocate for increasing this limit to 30-40% or adopting a more flexible model.

“

Such a limit does not align with market practices and restricts opportunities to encourage higher quality milk production, therefore it is proposed to increase it to 30-40% or abandon it altogether and apply a more flexible model.

Further objections focus on the potential for unclear norms to complicate business operations. Some organizations view the proposed disclosure requirements for bonus and premium systems as excessive, while certain provisions are deemed too broad or insufficiently clear. Processors are also pushing for a principle of dual responsibility, ensuring equal rules for both milk buyers and sellers, as they believe the current proposed model is too one-sided.

The market participants also raise concerns about competition, urging a thorough impact assessment. They criticize the potential concentration of milk testing in a state laboratory and question the price-setting limitations, asserting that regulations should not artificially restrict competition or grant exclusive rights. The majority of the dairy farmer organizations providing feedback represent producers selling over 40 tons of raw milk monthly, accounting for over 73% of total milk purchases in April.

“

Part of the organizations assess that the disclosure requirements stipulated in the project regarding bonus and premium systems are excessive, and some provisions are too broad or insufficiently clear.