Prolek seeks alternative processors as 68 family-run dairy farms face uncertainty after the EKABE supply shift
French dairy giant Lactalis has announced that it will end milk collection agreements with Luxembourg dairy farmers from March 2027, a move that has sent shockwaves through the country’s dairy sector and triggered urgent discussions among cooperatives, processors and government officials.
The decision directly affects Prolek, a cooperative representing 68 family-run dairy farms that collectively produce around 50 million litres of milk annually. The volume accounts for an estimated 10% to 15% of Luxembourg’s total milk output, underlining the significance of the development for the national dairy industry and rural economy.
Prolek Calls Decision a Major Disappointment
Prolek president Vic Wirtz described the announcement as a serious setback for local milk producers but stressed that the cooperative is fully focused on finding sustainable solutions for all affected members.
The cooperative has already opened negotiations with major dairy processors, including Luxlait, Muh-Arla and Hochwald, to secure future milk collection agreements before existing contracts expire.
Industry stakeholders and government representatives have also moved quickly to organise crisis meetings, reflecting growing concerns over the potential impact on Luxembourg’s dairy supply chain, farm incomes and long-term milk production capacity.
Why Lactalis Is Ending Local Milk Collection
Lactalis clarified that the company is not exiting Luxembourg entirely. Instead, it plans to continue operating the EKABE facility while sourcing milk supplies from outside the country after March 2027.
According to the company, the decision was driven by difficult conditions in international dairy ingredient markets. Lactalis cited shrinking profit margins, increased global competition and the relatively high cost of milk procurement in Luxembourg as key reasons behind the move.
The company explained that much of the milk collected through the EKABE network is processed into dairy ingredients destined for highly competitive international markets. Under current market conditions, sourcing higher-cost Luxembourg milk for these operations has become economically unsustainable.
Luxembourg Dairy Sector Faces Fresh Challenges
The development has intensified concerns within the Luxembourg dairy sector about the future competitiveness of local milk production. Farmers and industry leaders fear that losing a major milk buyer could place additional pressure on already challenging market conditions.
The Luxembourg government has pledged support for affected dairy farmers, while sector representatives continue discussions to safeguard milk collection infrastructure and protect rural livelihoods.
The announcement also highlights broader pressures facing the European dairy industry, including volatile dairy commodity markets, rising production costs, and shifting global demand patterns.
Industry Watches for Long-Term Impact
As negotiations continue between Prolek and alternative dairy processors, the coming months will be critical for determining how Luxembourg’s dairy sector adapts to the loss of one of its key milk collection partnerships.
The outcome could influence not only the future of affected farms but also broader discussions around dairy market resilience, milk pricing structures and the sustainability of regional dairy supply chains across Europe.
