Lactalis ready to discuss milk prices with angry French farmers

August 23, 2016 12:25 PM EDT

French dairy farmers from the FNSEA union gather as they block the round-about access to the Lactalis plant as they protest against the price of milk in Laval, France, August 23, 2016. REUTERS/Stephane Mahe

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PARIS (Reuters) - Europe's largest dairy producer, Lactalis, said on Tuesday it was ready to renegotiate milk prices paid to producers after hundreds of farmers protested outside its headquarters in northwestern France demanding higher prices.

Lactalis will meet French milk producers in Paris on Thursday morning, members of France's largest farm union FNSEA said separately after holding talks with Lactalis representatives near the company's base in the town of Laval.

European milk farmers are struggling with a slump in prices caused by the European Union ending quotas last year, Russia's ban on Western food imports and weak Chinese dairy imports.

Unions say the current price paid by Lactalis to French producers of 257 euros per 1,000 liters of milk is well below producers' costs and is between 10 and 30 euros below the price paid by competitors such as Danone, Sodiaal and Bel.

Family-owned Lactalis' brands include Président, Bridel, Galbani and Lactel, producing butter, milk and cheese.

"The group is ready to-reopen talks," Lactalis spokesman Michel Nalet told Europe 1 radio without giving any details on any potential price change. "We never closed our door."

Nalet stressed that the group faced strong competition elsewhere in the European Union where prices have fallen more steeply in the past year than in France.

In June, raw milk prices paid to producers stood at 27.70 euros per 100 kilograms in France, compared to 23.22 euros/100 kg in top producer Germany, 25.12 euros/100 kg in the UK and 25.00 euros/100 kg in the Netherlands, European Commission data showed.

As many as 400 farmers staged a protest at Lactalis' headquarters in Laval overnight and between 250 and 300 were still there on Tuesday afternoon, accompanied by tractors, cows and trailers.

Agriculture Minister Stephane Le Foll on Monday called for talks on milk prices, adding that the government was ready to mediate to help resolve the situation.

Le Foll said he would put forward "in the coming days" a wider plan on the implementation of EU measures to limit milk output, which would also tackle price slumps in the livestock and grain sectors.

The European Commission, the EU executive, said in July it would grant an additional 500 million euros ($567 mln) to struggling farmers, including subsidies to reduce milk output.

It also granted a package of 500 million euros in September last year, targeting mainly cash-flow difficulties and market stabilization.

(Reporting by Sybille de La Hamaide in Paris and Pierre-Henri Allain in Laval; Editing by Jason Neely and Susan Fenton)

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