Tough Time for Milk Companies in Tunisia

Tunisian milk

Dairy companies in Tunisia are facing a very difficulty environment, which could lead to a series of bankruptcies and liquidations if nothing changes.

Skyrocketing costs of primary and raw materials led the leading companies and their association to call for price increases of milk and related products, essentially to cover the cost coming from farmers and milk collection centers.

The calls for higher milk prices may be challenged by authorities because the industry underwent four recent increases totaling 170 millimes per liter of milk. Additional increases, however, are expected to help reduce the losses generated by milk and dairy companies, estimated at TND 18 million in 2007 alone.

Of the six milk and dairy firms active in the Tunisian market; four are at risk of bankruptcy after accumulating losses last year. This also threatens to break a balance in supply and demand, especially since Tunisia managed to avoid imports in 2007 as domestic production covered demand. The current area of focus for the milk industry is packaging, with initiatives seeking to reduce the content of packaging to reduce cost. However, there is a recognition that current technologies in milk packaging would lead to a reduction in the conservation period for milk down to 15 days.