Nestlé accused of deducting dairy farmers: POSS hands and feet when acquiring

A barrel of milk is one kilogram less. A few days ago, Xinhua News Agency reported that Nestle Company in Heilongjiang Shuangcheng City deducted dairy farmers, which triggered widespread concern and hot discussion in various sectors of the society. According to a survey by the Xinhua News Agency reporter, the local Nestle company has been detaining dairy farmers for many years. This has become an “open secret.” Why Nestle milk companies will deduct milk farmers for many years? How to increase the ability of dairy farmers to compete in the market? CCTV Finance Channel host Shi Xiaonuo and famous financial commentators Ma Guangyuan and Liu Ge jointly commented.

Nestle Nestle accused of long-term deduction of dairy farmers, short-term acquisition, the annual price has become an open secret, why dairy farmers choose to calmly accept? Why is Nestlé alone in the twin cities?

One kilogram of milk is less than one kilogram, and it has become a “public secret” that dairy farmers have been deducted for many years. The report of a survey of Nestle's low-cost dairy business model in a dual-city Xinhua News Agency has received much public attention.

Xinhua News Agency reporter Cheng Zilong: A survey was specifically conducted on the deductions of dairy farmers, so we chose to track the dairy farmers' scales at the time, that is, the dairy farmers squeezed their own milk and milked milk, and then they reached milk. Standing to see how many pounds he was giving, the dairy farmers reported that they were making hands and feet on the scales. Although there was no evidence on the scales, there was no evidence, but the milk was actually squeezed out by the dairy farmer, and finally he had to give it to the dairy farmer. Inconsistent, less milk than dairy farmers squeeze out.

Xinhua News Agency reporter Cheng Zilong: I personally witnessed them doing hand and foot processing on a POSS machine. For example, there are decimal points on the screen, but the numbers after the decimal point are handled by him as 0 and 5, and then I ask him how to deal with it. Why didn’t we actually calculate it by the number of kilograms, he said that we adopted a round-off approach. As a result, I found that the method of rounding off is problematic. I said that if the decimal point is followed by 3, it is relegated to 0, if it is 4, enter 5, if the number behind the decimal point is 8, then it will be 5, if it is 9 it will be 0, then it will be much more rounded out, less carry, so I think it is counted It is a way to deduct dairy farmers.

He Wei (Prosecution Manager, Group Affairs Division, Nestlé China Ltd.): Nestlé does not deceive farmers and we absolutely do not tolerate this practice. We are also building a new service hotline for farmers in the Shuangcheng factory. The service hotline will answer and solve the farmers' inquiries and complaints. We also welcome the government's audit and supervision of the milk collection station. Nestlé does not have a monopoly. The two cities actually have other dairy companies. The relationship of this joint venture company is With regard to historical issues, we are now discussing with the (local) government. We also hope to find a way to continue this successful situation in the twin cities.

Liu Ge: The loss of one kilogram was passed on to the dairy farmers

("Observation Today" commentator)

I have a suggestion for reporters. If you do such an investigation, you should take the scales of the dairy farmers' households and take them to the technical supervision department to do a verification, so that you can really grasp the evidence. If the milk station now really deducts the dairy farmers through big buckets and small buckets, it is indeed rather bad. The reason for this is that in the past, there was a problem in rural milk collection. There was a loss in the acquisition and transportation. This loss should have been borne by the company, but if there was a problem with the assessment criteria between the milk company and the milk station, there was no problem. Taking care of this, then he may have to pass on this loss, so that more than 70 kilograms in each barrel, and finally there is a natural loss of one or two kilograms transferred to the dairy farmers here. If this is really the case of a Xinhua News Agency reporter's investigation, then this may be one of the reasons.

Ma Guangyuan: This is a game between a strong company and a weak dairy farmer.

("Observation Today" commentator)

The matter itself is 1 kilogram of milk that disappears. From the current status of dairy farmers, including Twin City Nestle, this matter seems very logical. For example, in this city, the exclusive enterprises that buy milk are faced with a large number of farmers, so the focus of their conflicts is not only the quantity but also the price. Throughout the entire process, we are now seeing a game between a strong enterprise and a weak dairy farmer. Once this kind of game arises, for example, the media reported that there are only two shortfalls, and the price of playing tricks, including the deduction of dairy farmers in other aspects, this seems very logical to everyone.

This 1 kilogram of milk does not reflect the entire contradiction. There are still some places where the interests of both parties cannot be taken care of. After this report came out, there were many media outlets who had made comments and shifted the focus of the contradiction to Nestle. Including, for example, the previous relationship between Nestlé and the Shuangcheng government, and a series of contradictions. So I think this is consistent with our usual logic. But what exactly is reflected behind this? It may still be the interests of both parties. There is a big contradiction between the interests of dairy farmers and those of powerful companies. Then, with the outbreak of this contradiction, I think not only we have lost 1 kilogram of milk.

According to Xinhua News Agency's survey, Shuangcheng dairy farmers reported that prior to Heilongjiang Province's implementation of the "Guided Price for the Acquisition of Fresh Milk" in Heilongjiang Province in 2010, Nestle's purchase price for dairy farmers was the lowest, sometimes only 1.6 yuan/kg. The Bi-City Bureau of Animal Husbandry introduced that Shuangcheng City had signed an agreement with Nestlé before and after 2002, and it is forbidden to build other dairy companies in Shuangcheng City. The fresh milk in the dual cities must in principle be handed over to Nestlé.

Cheng Zilong (Xinhua News Agency): When the Twin Cities attracted investment from Nestlé, the local government and Nestle had a commitment not to build a milk station or to build any other dairy companies.

Liu Ge: Dairy farmers are in a weak position in the industry chain

("Observation Today" commentator)

The Nestlé Twins factory is Nestlé’s first factory in China because Shuangcheng is a large agricultural county and its food production now ranks in the top five in the country. Therefore, in such a large county, it has very good conditions for animal husbandry and aquaculture. Many local farmers are rich because they raise cattle. The average annual income of the local farmers has increased from 4,000 yuan in the 11th Five-Year Plan period to more than 8,000 yuan. The cattle-raising here has made a great contribution. Because Nestlé was camped early in this place, other dairy companies may seldom touch the place. Therefore, it forms a natural monopoly, and dairy farmers can only sell milk to the company. As a small peasant economy, then dairy farmers are in a weak position in such an industrial chain.

Before that, an expert wrote a special article called the "Nestle Model". This model is a way to explore each other, that is, the company + farmers, the middle milk station is a third party However, in the Nestlé factory, they are integrated with the company. This is to ensure the quality of milk collection. The milk station staff is the company's employees. This is part of Nestle's so-called Nestle model. In addition, in the second half of 2007, in response to the serious realities of the non-sequential competition in the milk market and the outflow of raw milk, the Shuangcheng City transferred an inspection team composed of livestock, industry and commerce, and public security agencies to focus on the mobile milk collectors. Clean up. Experts described this article as a condition of the "Nestle Model."

Ma Guangyuan: The formation of a monopoly creates a focus of contradiction between the two sides

("Observation Today" commentator)

Looking at the history of the development of dairy cows in Shuangcheng itself, we can say that if no Nestlé was introduced that year, there may not be a dairy industry in Shuangcheng today. Therefore, from the perspective of historical development, both sides should have a "honeymoon period." For example, the income of dairy farmers is constantly increasing. It has doubled in the “Eleventh Five-Year” to “Twelfth Five-Year” period. This is a huge achievement. But on the first day when Nestle entered the Twin Cities, it actually buried a rift in the interests of both parties. First, at the time, in order to introduce Nestlé, the local government signed an exclusive agreement with Nestle. Today, the formation of a monopoly has also caused a contradiction between the two parties. For example, during the entire process, some dairy farmers thought the price was low, and I wanted to sell it to other companies. The local government sent a lot of people to stop it. If this pattern continues, this contradiction will occur sooner or later.

Investigation of the damage to the interests of dairy farmers has drawn attention. Why did the rules of fair trading fail in the two cities? How to enhance dairy farmers' game ability in the market?

Liu Ge: Dairy farmers can hardly be protected without negotiating rights

("Observation Today" commentator)

In fact, the basic model of milk production in China's dairy industry determines the contradiction between each other, because unlike many developed countries, they are large-scale farming plants, pasture-to-plants, and we are farmers+company models. The advantage of this model is that farmers will be able to realize their interest growth throughout the entire process.

In these years, raw materials have tripled, but milk prices have risen less than one time. In this process, who will digest this cost? Although both parties are on an industrial chain, they have their own interests. As a strong party, Nestlé has established the so-called "Nestle Model." Then, when such mutual redistribution of interests occurs, it is natural to protect their own interests. In this process, since the peasants are a family-owned small-scale peasant economy, he does not have the bargaining power, and the Twin Cities do not seem to have some places. At the same time, several companies compete with each other and fight milk sources. If so, farmers have the right to negotiate. The Shuangcheng City has naturally formed such a monopoly over a long period of time. The peasants lack the right to negotiate, so the interests cannot be guaranteed.

Over the years, the local government has also made some efforts. For example, when the price of milk is low, work with companies, but this is not a long-term solution. And this cooperation so far, because of the lack of competition, there is now a rift.

Ma Guangyuan: To strengthen the bargaining power of dairy farmers to form a relatively good balance of interests mechanism

("Observation Today" commentator)

The root is still monopolized, and it is a pure monopoly, and even oligopoly is not. Even if there are two dairy companies, such as Wandashan or Guangming in the Twin Cities, Nestle’s market competition strategy will not be the same. The entire market we are seeing now is a crack in the interests of a company in the case of a totally uncontested situation. For a company, when he comes to a monopoly, he will naturally show that He monopolized the nature.

In fact, although the Shuangcheng model itself is rather extreme, the most fundamental reflection is the imbalance between the interests of dairy companies and dairy farmers, and there is no mechanism for balancing interests. For example, the dairy farmers are cyclical. When the industry is more prosperous, people are rushing to raise cattle. However, when the industry has problems, it will happen that the cows are killed and the milk is poured. So, how to counterbalance this mechanism is not only a twin city, but it will be a big problem for our country's aquaculture industry.

So, the most fundamental reason, where is the most fundamental path? That is how to increase the bargaining power of dairy farmers. In the face of a strong dairy company, dairy farmers can completely break it up. On the whole, dairy farmers themselves do not have their own representatives, they do not have their own checks and balances, and they rely on the government itself to do the work. It is not an institutionalization in itself. Therefore, many foreign dairy farmers are cultivating alone, but he has an association of dairy farmers. He has agencies representing his own interests, and this institution has to negotiate on prices and form a relatively good balance of interests mechanism. For our entire farming now, the most fundamental thing is how we balance this kind of interest mechanism so that every chain in the industry chain can get its own way, and it can realize the maximization of interests. This is the need of our entire industry to work hard. of.

Wang Dingmian: Dairy farmers have no say at all

The status of dairy companies determines that the interests of dairy farmers are not guaranteed (dairy expert “Today Watch” special commentator)

First of all, as dairy farmers in the entire dairy industry chain, the status is the lowest, they simply do not have the right to speak, the initiative in the dairy business, their status determines that the interests of dairy farmers are not guaranteed.

The way out now I personally think: First, the concept of change, to encourage the enthusiasm of farmers for cattle, give them basic protection, dairy companies can not be too harsh they must treat them; second, to open the price of milk; third, Take government intervention or industry associations to come up with the minimum protection price. At the very least, cattle breeding now does not make money, but it does not allow them to lose money. The price of milk collected is lower than the cost price, appropriate feed subsidies may be provided, and it may even be stipulated that they have such low profits as 10% and 5%.

Liu Ge: The original company + farmer's approach needs to be adjusted over time

("Observation Today" commentator)

What we have summed up before was a way for companies + farmers, but now it seems that this approach needs to be adjusted over time. For example, some places are already engaged in feeding cooperatives or large-scale cattle-raising plants. This is a new way to replace the original method. This new approach may have the benefit of coordinating each other's interests and will improve over the old ones.

Ma Guangyuan: Now we need to restructure our own industrial policy model

("Observation Today" commentator)

For our aquaculture industry, it may now be necessary to restructure its own industrial policy model.