Paris, Aug 28 - Entremont-Alliance, France's biggest producer of Emmental cheese, reached an agreement with farmers on Thursday to end the first dispute since a recent move to liberalise the country's system for setting milk prices.
Entremont accepted the farmers' demand for an increase of 49 euros per 1,000 litres of milk for the July to September period, in line with the price rise other dairy manufacturers have agreed to pay their suppliers.
In return, the farmers agreed to examine with Entremont and other companies the development of a new pricing system that would be more reactive to prices on the world market.
"We have secured a win-win deal," said Joel Limouzin, head of the regional branch of the FRSEA farmers' union following Thursday morning's talks with Entremont.
Underlying the standoff between Entremont and its milk suppliers is the future of the system under which French dairy farmers and dairy food manufacturers like Entremont, Lactalis or yoghurt giant Danone agree prices.
Under the previous system, a recommended price was set every three months by CNIEL, a so-called "interprofessional" body representing both farmers and manufacturers that gave the industry a fixed guide to prices.
But earlier this year France's competition authorities ordered an end to this way of setting milk prices.
Manufacturers like Entremont say the old system did not allow them to respond quickly to competitors from countries such as New Zealand or Denmark, whereas farmers fear the regulatory change will leave companies free to impose their own prices on suppliers.
The dispute between Entremont and dairy farmers in Brittany was triggered by the company's offer in July of a price rise of 30 euros per 1,000 litres, well below the 49 euros rise that farmers have been seeking.
Following Thursday's settlement, union officials called for farmers to lift barricades that have blocked access to Entremont's sites since Wednesday evening.