Value of British liquid milk market down due to retailer price war

The total value of the British retail milk market in the 12 weeks to July 20 was down by £12million (€14m) compared to the same period a year earlier.

This is according to DairyCo which notes that this has been driven by price cuts introduced by most of the major retailers in March, despite the volume of milk sold in GB continuing to grow.

Up until March 2014, the average price for a litre of pasteurised milk in the four main retailers had been relatively stable at around 56ppl. According to Kantar Worldpanel, the price cuts at retail level saw this drop to 50ppl in April 2014 – a reduction of 10%.

A continuation of intense price competition at retail level could add further pressure to processor margins, which could potentially affect prices for those farmers not on a cost of production model. However, this will be affected by processors’ abilities to safeguard margins through opportunities to drive growth and improve efficiencies.

In Ireland the fresh milk market is the largest consumer market for milk and milk products in the State with an estimated retail value of €513m in 2013. National consumption of fresh liquid milk in 2013 was 552 million litres. Average per capita consumption in the State of 0.34 litres per day was the second highest in the EU.

Last year consumption of fresh milk on the domestic market increased by 0.4% to 565 million litres. Per capita consumption of fresh milk in the State of  0.34 litres per day is the second highest in the EU and almost double the EU average.

 

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