Kerrygold butter is on sale in Kerry, and throughout Ireland, for 65 per cent more than it costs in Berlin. The large differential is likely to leave Irish consumers scratching their heads and saying they can’t believe it’s not butter price-gouging.
This week, Lidl in Germany has been selling 250g of Kerrygold for €1.99 – a per-kilogram price of €7.96. By contrast, Irish supermarkets have been selling 227g of the very same product for €2.99 – which works out at €13.17 per kilo, or 65 per cent dearer.
The 454g size of Kerrygold in Ireland, meanwhile, sells for €4.99 across all the leading supermarkets. This equates to a per-kilo price of €10.99, still 38 per cent more expensive than the cost in Germany.
The differential is so large that someone could – theoretically at least – book a return flight from Dublin to Berlin, buy 20kg of Kerrygold at the discounted price and sell it at home with the profit handily covering the cost of the trip.
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The Irish Times contacted Ornua, the co-op which makes and sells Kerrygold in both countries, as well as Lidl Ireland and the Irish Creamery Milk Suppliers Association (ICMSA) to find how such a large price discrepancy was possible, particularly when the product is Irish-made with milk from Irish cows.
The umbrella group representing dairy farmers said it had no insight into how retail pricing works either in Ireland or Germany.
“Dairy farmers are effectively at the mercy of those further along the supply chain,” ICMSA president Denis Drennan said. “No one in Ireland, or the EU for that matter, seems particularly bothered to really go in and have a look at margins along the supply chain or how retailers arrive at their price to the consumers.”
An Ornua spokesman said that while it makes and sells the product to retailers, it is entirely up to the retailers how much they charge. A Lidl Ireland spokeswoman said the retailer “regularly offers various price promotions across countries on butter as part of its promotional strategy”.
That is what has been happening in Germany, where retailers adopt a particularly aggressive approach to butter pricing and routinely use heavy discounts to drive footfall.
Kerrygold is the market-leading butter product in that country and even has a street named after it in Neukirchen-Vluyn, the town in the North Rhine-Westphalia region where it has its German headquarters.
Because of its pre-eminent position in supermarkets there, it is often front and centre when it comes to promotions and the €1.99 price it is selling for in German Lidls forms part of a weeklong footfall driver.
It is likely to return to its normal price of €3.49 per 250g over the weekend, a level comparable with the Irish price.
