French dairy giant Lactalis has warned that it may exit Algeria if workers at its factory in Béni Tamou continue to stop production. The company has faced a mutiny by some of its workers over pay, conditions and disciplinary proceedings.

Since the 20th June, some of its 350 factory workers at its subsidiary Célia Algeria have stopped production, demanding changes in working conditions and pay and the end of disciplinary proceedings.

On the 22nd June Célia Algeria obtained a court order to retain possession of its factory once more. The company has also reportedly offered concessions including pay rises, changes in working conditions and a 3 year roadmap.

Lactalis has operated in Algeria since 1980, when it first started importing milk powder.  In 2007 it partnered with Groupe Soummam to buy the Béni Tamou from the Algerian government. In 2013 it bought out Groupe Soummam to own 100% of subsidiary Célia Algeria.

Despite the slowdown of the Algerian economy since the beginning of 2019, French companies have held firm, with no exits from the country. The Algerian operating environment is notoriously difficult, and entrants face a dilemma: most are recommended to partner with an Algerian firm to help them navigate issues such as local regulation and labour disputes. But there is a limited pool of viable partners and the best of them tend to demand a high price for their involvement.