Irish farmers warn of price war after Lidl cuts milk and butter prices amid rising costs

Retailers cut milk and butter prices nationwide, but farm groups warn rising costs mean producers face mounting financial strain

A decision by Lidl to cut the price of milk and butter on Thursday is set to spark a supermarket price war which farmers warn will heap pressure on the sector just as prices have rocketed due to the Iran war.

A decision by Lidl to cut the price of milk and butter on Thursday is set to spark a supermarket price war which farmers warn will heap pressure on the sector just as prices have rocketed due to the Iran war.

Lidl announced a reduction in its own-brand milk and butter range on Thursday, which the retailer says will result in savings of €5m for Lidl customers. 

The price of a standard 2-litre carton of milk will drop to €2.25, while a 454g (1lb) block of Irish Creamery Butter will be reduced from €3.39 to €2.99.

On Thursday afternoon, SuperValu Centra, Aldi, and Tesco followed suit, matching the own-brand milk and butter prices, with 454g own-brand butter products cut from €3.39 to €2.99, while milk products reduced from €2.35 to €2.25 for a 2-litre carton. 

The cuts are likely to be reciprocated by other supermarkets. In October 2025, Lidl cut around 10c off the price of a 2L carton, a move which sparked a round of reductions across most major Irish supermarkets on the price of their own brand milk. 

Tesco, Dunnes Stores, SuperValu, and Aldi all responded with similar cuts. 

According to the IFA, the cuts will end up damaging the sector, which has seen average milk prices paid to farmers fall from a peak of over 50c per litre in June 2025 to below 39c in February 2025. In the 12 months to January 2026, the milk outward price dropped by 27.3%, according to the CSO. This comes as costs for farmers have increased, according to IFA Liquid Milk chair Henry Dunne.

“This week we have huge spikes in fertiliser and energy costs and yet the supermarkets have made these cuts this morning. The cuts are tone deaf and a kick in the teeth for farmers,” said Mr Dunne. 

“The reality is that farmers who are set up to produce fresh milk, and therefore have higher costs, have had a very difficult winter with prices falling and costs rising,” he said.

The Irish Creamery Milk Suppliers Association (ICMSA), representing over 16,000 members from the dairy sector, said the external pressures on the industry means Irish farmers are producing milk at a loss. 

“Right now the farmers producing the milk on which all these products are based are receiving a price that’s less than the costs of production," said ICMSA president Denis Drennan.

"The man or woman milking a herd of cows twice a day is actually losing money now twice per day and losing income at precisely the same time as their two biggest input costs – fertiliser and energy – are going up like rockets."

The IFA had contacted retailers and processors seeking an extra 5c/l for producers. 

"Now instead of passing back a modest increase to farmers the supermarkets have started a price war on milk and butter,” said Mr Dunne. “Farmers are exiting fresh milk production in significant numbers. Today’s announcement will speed up the exodus. Soon, we will not be producing enough milk during the winter months,” he said.

Lidl said its price cut reflects lower commodity costs at the till. 

"Our longstanding commitment to our customers is that we won’t be beaten on price and we’re proud to once again lead the market by dropping the price of milk and butter, passing savings directly on to our shoppers," said Lidl Ireland chief executive Robert Ryan. 

"We remain dedicated partners to the Irish agricultural community, ensuring that as we deliver value to shoppers, we continue to support the long-term viability of the local producers who supply our 100% Irish milk and butter."