Barcelona-based Grupo Damm is best known for its beers. One of the four main breweries in Spain, other activities include the production of the chocolate milk drink Laccao. Related to this is the group's ownership of Agama, a milk producer in Palma that was founded in 1958.
A month ago, Damm announced the closure of the Agama plant, which the company had taken over in 2017. There was almost an inevitability that this would happen, attributed to a progressive reduction in orders, foreign competition, and the costs of production in Mallorca - the 'insularity' factor. Nevertheless, it came as a great shock, not least to the Balearic Government.
Suppliers to the Agama plant have accused Damm of only having been interested in shifting production of Laccao totally to Catalonia. "We trusted Damm, which had opted for local produce, but you can see how it has ended," said Miquel Vanrell a month ago. He is the owner of one of three supplier farms in Mallorca. There had at one time been six farms.
The purchase of milk ended yesterday (March 31), farmers saying this broke an agreement by which they would continue supplies until September this year.
On Tuesday, Mallorcan dairy farmers issued a statement calling on the public to boycott Damm products. This was because of "the breach of contract the company had communicated to the sector after announcing the closure of Agama". The mayor of Campos, Xisca Porquer, recently urged the public not to buy Damm products. Vanrell's farm is in Campos, the home town of Marga Prohens, the president of the Balearics and, like Porquer, a member of the Partido Popular.
The agriculture ministry, it is now reported, has opened investigations into what is said to be "misleading" advertising for Laccao. A slogan reads: 'Laccao is Mallorca. Mallorca is Laccao.' Ministry officials believe this is misleading as milk from elsewhere is used in the production of Laccao, while packaging is also done elsewhere.
The company potentially faces a fine of up to €30,000. In the wider scheme of things, a fine of this amount, were it to stick, would be largely inconsequential. But the government has wanted to act in some way, and so it has.