Milk and cheese prices to increase

THE cost of milk and cheese is expected to increase in coming weeks as companies push to hike prices.

Glanbia, which controls brands including Avonmore, CMP, Yoplait, Kilmeaden, Premier Milk and Snowcream, is recommending a price increase from Sunday.

Kerry Group said a price increase remains “under review” given the increase in the cost of raw materials, fuel and packaging.

A Glanbia spokesman said global dairy prices have been increasing over the last 16 months.

“These global increases have a direct knock-on effect on farmgate prices in Ireland, which have increased by 24% since the start of 2010.”

He said Glanbia is “very aware” of the pressures facing consumers and has absorbed these cost increases over the last year.

“However with no significant reductions presently forecasted, Glanbia must now pass these increases on, with an 11% price increase planned on selected lines in the near future,” he said.

The increases will be mainly on two-litre packs, with other formats such as one-litre packs remaining unchanged.

Increases of between 4.5% and 11% are planned across milk, cheese and butter are planned from Sunday.

The country’s creameries are struggling as large supermarkets cut the prices on own-brand dairy products. According to experts many consumers are shunning traditional dairy brands in favour of own-brand products from Tesco, Dunnes and other supermarkets.

They said that own-brand milk will generally be cheaper than branded milk and many consumers opt for the cheaper brand.

Many independent retailers are understood to be selling milk at a loss in a bid to encourage customers to buy other items when they are in the shop.

However, the price paid to farmers who supply milk to retailers is still very low.

IFA national liquid milk committee chairman, Padraig Mulligan, said dairies and supermarkets must call a halt to their “reckless pricing” behaviour or render the country’s entire liquid milk market “uneconomic and unsustainable”.

He said dairies are failing to recognise farmers’ increased production costs by paying viable milk prices.

“Distressed greengrocers and corner shops are selling imported milk at a loss, in a desperate bid to attract consumers and large multiples are watching anxiously and threatening to follow suit to protect their reputations, at the risk of destroying the sustainability of the entire liquid milk market and production system in the Republic of Ireland,” he said.