Farmers fear milk ‘price war’ as retailers discount product

Protests outside Dunnes Stores and Aldi in Portlaoise

Photograph: Reuters

Photograph: Reuters

 

Fears of a milk price war sparked protests by dairy farmers from across Ireland in Co Laois on Wednesday.

Irish Farmers Association (IFA) milk producers held protests at supermarkets in Portlaoise in response to what they view as the threat of a “cynical market-grabbing milk price war” by retailers.

The protests outside Dunnes Stores and Aldi in Portlaoise were led by IFA president Joe Healy.

The IFA says farmers are concerned that Dunnes Stores’s “long standing” discount of milk at 67 cent per litre could spark a milk price war with Aldi lowering its milk prices this week.

According to Mr Healy, “there is no such thing as cheap milk”.

Dunnes has been selling two three-litre cartons of milk at a special discount rate of €4, which corresponds to 67c per litre. Aldi recently started selling one three-litre carton for €2.

Farmers’ groups claim it costs roughly 40 cent to produce a litre of milk when labour costs are included, and that the current round of price cutting will eventually lead to reduced prices paid to farmers.

“Fresh milk producers incur high costs and legitimately expect to be able to cover their costs and make a reasonable income from their specialist milk production. Yet, experience tells us that farmers always come out the worst of those cynical grabs for market share by retailers,” Mr Healy said.

“Any apparent benefit for consumers is short-lived, with the security of year-round, local supplies of milk from freshly calved cows being threatened by the erosion of margins in the chain,” said Mr Healy.

An Aldi spokesperson said: “Our promise to our customers is that we won’t be beaten on price. To ensure we continue to provide the very best value groceries in Ireland, we have followed the market and reduced the price of our three litre milk to €2.

“The cost of the price cut is being borne by Aldi. Aldi pays its suppliers a fair and sustainable price for all its products including its milk,” the spokesperson concluded.