NETHERLANDS – Dutch dairy cooperative Campina rightfully cut the pensions of thousands of pensioners in 2004, a Dutch high court has ruled.

The Gerechtshof in Arnhem overturned a previous ruling by a lower court, which said the dairy giant must conform to the 1.9% inflation rate rather than the intended 0.7% rate in its payments to 6,200 pensioners in 2004.

The lower court had further ruled Campina would face fines of up to E5m if it did not maintain full indexation.

The dispute started in 2003 as the cooperative, which recently merged with Arla Foods of Denmark, embarked on a cost-cutting exercise, which included pensions.

Campina had cut the price indexation of its E800m defined contribution fund to 0.7%, instead of at the estimated inflation rate, angering its pensioners represented by the Campina pensioners’ association, or VGP.

VGP chairman Ben Reusken said he was “disappointed” with the latest ruling. “We will study it this afternoon, and then we will decide what our next step will be.” The VGP still has one procedure pending against the dairy products manufacturer, covering the 2004-2008 period. A ruling is expected at the end of February.

Anton Ooyen, chairman of the Campina pension fund, said he was “satisfied” with the outcome.

The ruling means Campina pensioners will receive some E20 a month less. It remained unclear whether the dairy giant could force pensioners to pay back the extra money they have received.