October 12, 2007

High milk prices push Danone to raise prices of dairy products 10 percent

Groupe Danone said it is to raise the prices of its dairy products in France by 10 percent from Nov 21 due to sharply higher milk prices.

Danone France said prices charged by suppliers jumped 20 percent, on top of a 5 percent rise in July. Prices are expected to rise further the next quarter.

The rise in milk prices comes after a decade of stable prices was attributed to lower  output in Australia and New Zealand and higher global demand, especially from China.

Danone's competitor, Lactalis, the number one cheese producer in Europe, has announced price hikes of 15 percent, on top of a 2.5 percent increase this summer.