Issue 48

Online auction secures best price of the day for lactose

Customers are positive about buying Arla Foods Ingredients’ food-grade lactose via the Global Dairy Trade platform

Many new customers are buying Arla Foods Ingredients lactose through the Global Dairy Trade (GDT) online auction platform. By placing bids at the fortnightly auctions, they can be sure to buy lactose at the best global price of the day.

“Customers are primarily positive about the objective price setting that results when trading under market conditions,” says senior manager Morten Kaas Hansen.
Arla Foods Ingredients joined the platform in April 2015 following an extensive expansion of its lactose processing capabilities - an investment that has made the company one of the largest lactose suppliers in the world.

Successful start
Although the first auctions of food-grade lactose took place in a falling market, Hansen reports on a successful first six months.
“The selling price represents the global benchmark for us and our customers. By eliminating the price discussion, we only have to focus on a smooth administration and delivery process,” he explains.

“Through GDT, we have made contact with many new customers, primarily in Europe and Asia. This has helped raise awareness of what we can offer, both within lactose and in speciality whey proteins.
“Our plan is to increase the volumes we offer via the platform.”

Matching demand with supply

GDT auctions open for bidding after the sellers have reported their volumes for sale and starting price. If the total bids exceed the volume for sale, a new bidding round begins at a higher price. Further rounds are initiated until demand matches supply.
Arla Foods Ingredients is currently the only lactose supplier on GDT, where the longest auction so far has lasted two hours.

“We would welcome it if other lactose suppliers decided to join the platform,” Hansen says

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