Pascual Responds to Mercadona Milk Ban: Will Sell Elsewhere

Pascual estimates Mercadona's impact on its milk sales at less than 3%

Ortigosa del Monte, in Segovia, did not look like the setting for a commercial standoff. The plant served as the backdrop for Bezoya’s 50th anniversary, the group’s mineral water brand, with media invited to discuss bottles. But Tomás Pascual, president of Grupo Pascual, stepped into the fray without much prompting: “I am concerned about not being on all shelves, but if someone doesn’t want me there, I can do nothing; I will try to be elsewhere.” In other words: Mercadona has pulled its milk from the racks, and he is not going to beg to return.

The removal is selective. Pascual milk disappears from the Valencian chain’s supermarkets across Spain, except in Burgos and Segovia, the two provinces where it remains. Bezoya water and Bifrutas juices remain in the assortment nationwide. The manufacturer claims there was no prior communication explaining the reason and that none is needed: “We anticipated this; it was something we counted on.”

How significant is Mercadona in Pascual’s milk sales?

Less than 3% of its revenue. This is the figure the group uses to minimize the impact and underpin its entire narrative. It is not just any client—Mercadona accounts for 26.3% of the Spanish market share according to Kantar, comfortably the country’s leading distributor—but it is not a client on which the balance sheet depends. The philosophy repeated by the group’s president for years is not to rely on more than 10% of a single customer, product, or bank, precisely to avoid losing reaction capacity when such news arrives.

The executive insisted that the break did not catch him off guard, fitting the usual script of these wars: temporary withdrawals, cross-pressure, and negotiation tables that reopen when the calendar changes. “If we cannot reach consumers through one channel, we will reach them through another,” he summarized. He recalled that their relationship with distribution remains one of “collaboration,” although the definition of that word has changed considerably in the last two years.

The private label war and the study nobody cites

The core issue is not Pascual. It is price. Private labels have been gaining share in food retail amid inflation and soaring costs, and removing manufacturer references is another form of pressure in negotiations. The group’s president stated it elegantly: their bet is to be a “branded company”—the name, the value proposition—against the retailer’s milk.

This brings up the most repeated argument recently: that manufacturer quality justifies the premium. One should treat this with caution. There is a circulating claim that a comparative analysis of packaged Spanish milks declared Mercadona’s private label product the winner, leaving the manufacturer among the lowest-ranked. This reference is repeated without the report in hand and with a link pointing to a generic search, not the study itself. To evaluate this, one needs the document, not the headline.

What is clear is that the pressure is felt in prices. Pascual himself predicted “some stability for a while” and defended that many current price drops are compensating for increases the company did not apply during the worst of the cost crisis.

The milk organización criminal: €28 million fines that are documented

There is a less noticed datum that touches the same sector from another angle. Justice fined €28 million against Pascual, Danone, Lactalis, and Nestlé for agreeing and reducing uncertainty among themselves to weaken competition and farmers’ bargaining power, as reported by El Nacional. None of the four looks good in that picture, and it relativizes the victim role the manufacturer claims against the distributor.

Fresh, pasteurized milk and local farming

Behind this discussion lies another, more domestic battle: the type of milk purchased. Against long-life UHT milk, complaints are common among those who grew up on farms: anyone who drank non-skimmed milk with cream on top does not go back, considering every carton a substitute. Fresh milk has thus become the quality argument for some chains.

In Mercadona’s case, that fresh milk does not come from just anywhere. Some versions point to Naturleite, a relatively small cooperative in Lugo, as the producer behind the package. If so, the debate over quality would have less to do with the logo on the carton than with the farming behind it, which is exactly what proponents of local production argue: letting farmers sell directly with minimal processing.

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With the 3% figure in hand, Pascual can afford calm: the blow does not dismantle its income statement. The uncomfortable question is the other one, the one nobody answers with a number: how much is it worth staying on a shelf that no longer wants you, and how much does it cost, instead, to disappear from it?

Data and opinions derived from tracking the standoff between manufacturers and food distribution in Spain.