Supermarkets have cut the price of milk — but what about other household basics? 

The first cut in the price of a milk in a decade was confirmed in recent days but will it actually make any difference to households struggling with an inflation crisis?

Other Irish retailers have followed Lidl in cutting the price of milk — but despite that headline-grabbing cut, the cost of other grocery staples has shot up in the last year. Stock picture: Yui Mok/PA

“A trip to the checkout is now as dreaded as a trip to the dentist,” was a line trotted out at the weekend after a boost for households in the weekly shop prompted further questions over alleged “price gouging” hitting consumers.

When Lidl pushed out a statement on Friday afternoon to say it was dropping its milk prices, it had a domino effect as other supermarkets followed suit.

Lidl claimed that it was the first supermarket in Ireland to announce a price reduction on milk since 2009.

When one jumped, others followed.

An own-brand 2-litre carton of milk has now dropped by 10c at Lidl, Aldi, Tesco, and SuperValu.

Figures comparing grocery prices in March 2022 and 2023 demonstrate the pressure on shoppers' purchasing power. See below for more details. Irish Examiner Visual Media 

Undoubtedly, it is good news for consumers when a staple product in most households’ grocery baskets each week drops in price.

But it is important to put it in context. Milk was one of the many staples that had already risen sharply in price in the last year or so.

Since the Russian invasion of Ukraine, the national average price of milk had risen from €1.83 to €2.28. This was a rise of 24%.

The drop in prices announced on Friday brings a 2 litre down to €2.19, still significantly up on the average price a year ago.

Separately, farmers also warned that a price war between supermarkets on milk would risk the long-term sustainability of liquid milk producers in Ireland.

Furthermore, if there’s a “race to the bottom” in other areas, they warned farmers of other kinds could be squeezed out.

Irish Farmers’ Association fruit and vegetable committee chairperson Niall McCormack said key growers have exited in the past two years, and many growers are hanging on by a knife edge.

“Time and time again we are in crisis mode to save our sector. It simply cannot continue,” he added.

In any case, there have been price rises almost across the board for what we fill the shopping basket with in the past year.

Here are just some examples, comparing prices in March 2023 with the same month in 2022:

• White sliced pan of bread — €1.68 (up 17%);
• 500g of spaghetti — €1.40 (up 20%);
• Medium size chicken —€5.70 (up 15%);
• Irish cheddar (per kg)— €10.72 (up 18%);
• Large eggs per half dozen — €2.18 (up 20%);
• Butter per lb — €3.85 (up 22%);
• Onions per kg — €1.45 (up 20%).

Kantar, an agency which monitors supermarket prices and market share, said last month that grocery inflation is at a record 16.8%.

“The annual grocery bill [is] set to rise by €1,211 if consumers don’t make changes to their shopping habits,” its senior retail analyst Emer Healy said.

At a time when households are dealing with soaring energy bills and high housing costs to go along with this grocery inflation, very few can escape taking the hit when it comes to these increases.

Advocates for lower-income households such as St Vincent De Paul have said they are seeing families who are increasingly faced with the dilemma over whether to heat their homes or do a weekly shop. While a few cents here and there may not seem much in isolation, the cliché of “it all adds up” is proven true in this case.

Consumers’ Association of Ireland chairperson Michael Kilcoyne said that advice to families is usually to shop around but it is more difficult to find value during this period of inflation.

“The whole policy around pricing needs to be examined, and examined from the point of view of the consumer,” he said. “And sometimes supermarkets might use milk and sell it as a loss to get people in. 

A lot of different staples have increased and there is no control whatsoever on prices.

Amidst all this, the Government has been urged in recent weeks to intervene to help families struggling with high shopping bills as it is claimed that retailers are “gouging” consumers.

Labour’s finance spokesperson Ged Nash told the Dáil that lower- and modest- income families are at the very sharpest end of the “naked price gouging that is now going on”.

He has called on the Competition and Consumer Protection Commission to investigate such matters in the food market and to examine how profit-taking is contributing to the inflation problem, and to look at if price controls are required.

Last week at leaders’ questions, Taoiseach Leo Varadkar said that he has corresponded with the consumer protection watchdog regarding prices in supermarkets but that the Government would be “reluctant” to look at price controls.

“Legislation does exist that allows price controls to be imposed in certain circumstances but we do not have a good experience with price controls in this country, and around the world,” he said.

“We can control retail prices, but we cannot control wholesale prices, so we might be able to tell the small shop owner or the medium-sized shop owner what they can sell groceries for, but we cannot control the price at which they buy them from the wholesaler.”

Mr Kilcoyne also advised caution on price controls and said that when a maximum price is set for something, it would usually be the case then that price is what every consumer will be paying.

In a statement reacting to the milk reduction, which included the “dentist” quote, Mr Nash said: “These big and brave supermarkets must also commit to meaningful price reductions across the range of other products that they are using to cream it in.

“We need to see transparency in pricing and an acknowledgement from the Government that something has to give.”