Four large supermarkets cut price of milk for first time since cost of living crisis began

Tesco, Aldi, SuperValu and Lidl have all announced a reduction in the price of milk.

On Friday evening Lidl became the first large supermarket since the start of the cost of living crisis more than 18 months ago to reduce the cost of its milk.

The German discounter announced that it was rolling out a cut of around 5 per cent on many of its milk products from Saturday morning.

The move seemed likely to put significant pressure on the other supermarkets to follow suit given the degree of price matching that exists across the grocery market in the Republic. Within three hours Aldi had responded with a price cut of its own, followed shortly after by Tesco.

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The Lidl price cut came after what it said was “some reduction in the cost of milk production” in recent weeks.

The move will see the price of a two-litre carton of milk selling under the Lidl own-brand label fall from €2.29 to €2.19 while one litre of milk will fall in price from €1.15 to €1.09. The price of other milk-based products will also be reduced.

Lidl said the cuts would pass €2.7 million in savings “directly on to its shoppers in Ireland”.

“The past few months have posed significant challenges with rising inflation and the cost-of-living crisis, and we know this has been tough for our shoppers as well as our suppliers,” the chief executive of Lidl Ireland JP Scally said.

“That being said, there has recently been some reduction in the cost of milk production, and we’re pleased to be in a position to be the first retailer in Ireland to reflect this reduction in our milk prices in store, further underscoring our commitment to always being the best value retailer in the country. All our milk is sourced in Ireland, and we take great pride in working with the best producers on the island.”

While prices up and down supermarket aisles have climbed steadily over the last 18 months, the dairy section has been hit particularly hard.

[ Cost of living: How is it affecting young people, parents and others? ]

[ Supermarkets gird for price war as inflation bites ]

In the Autumn of 2021 a litre of full fat own-brand milk in Irish supermarkets cost 75 cent. Today and ahead of the price cut from Lidl, a litre of milk is priced at €1.15.

Higher input costs – notably energy and transportation – were blamed for the dramatic increase in prices over recent months.

However, with fuel prices now back at levels not seen since Autumn 2021 and wholesale energy costs also falling considerably pressure was coming to bear on supermarkets to pass on at least some of those savings to consumers.

When contacted by The Irish Times in advance of the Lidl announcement to see if and when they would lower the price of milk in line with lower input costs, Aldi had said it reviews “the market on a daily basis to ensure we remain the best value retailer in Ireland and we will not be beaten on price.”

A spokeswoman for Tesco said the pricing of the products are ” in line with the competitive market landscape.” She added that its pricing policy was always under review but said Tesco “cannot speculate on the future retail price of any product.”

SuperValu said on Thursday that the “effects of the very significant inflation shock that has been experienced globally that continue to impact the supply chain, as well as “input costs in a wide range of areas” that remain at significantly elevated levels.”

Late on Friday night the announced they were cutting the price to match the other supermarkets.

Dunnes Stores did not respond to queries from this newspaper.