Four supermarkets cut price of milk in boost for shoppers but farmers warn of ‘price war’ fallout

However, farmer representatives warned of the impact of a ‘price war’.

Tesco, SuperValu, Lidl and Aldi announced they would all reduce the price of two litres of their own-brand milk by 10c in what is the first reduction in the price of milk for many years. It was described as a move to “shield customers from price increases”.

Lidl was the first to announce the price cut yesterday evening, and it was quickly followed by Aldi, Tesco and SuperValu.

A Tesco Ireland spokesperson said the company had “confirmed it will reduce the consumer retail price on its two-litre fresh milk by 10c”. This followed identical reductions from Lidl and then Aldi. Lidl said it was the first time the price of milk has been reduced in its stores in more than 14 years.

SuperValu said last night that the retail price of SuperValu’s 2ltr own brand fresh and low-fat milk will reduce by 10c from €2.29 to €2.19 from Saturday 29 April.

The price reductions will be welcome news for shoppers as surging food prices continue to keep the rate of inflation high.

Lidl Ireland chief executive JP Scally said: “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.”

He added: “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.”

Natasha Adams, CEO of Tesco Ireland, said: “With household budgets under increasing pressure, we are absolutely committed to helping our customers, by keeping a laser focus on the cost of the weekly shop”.

Aldi acknowledged the “extremely challenging backdrop” for its customers as it took the move, which came after Lidl said its price reduction would pass on €2.7 million in savings directly to its shoppers in Ireland.

Policy and council adviser for the Consumer Association of Ireland (CAI), Dermott Jewell, said: “Milk is a very basic staple and what every home needs. This is a positive move.

“This is the beginning, hopefully, of a game changing of what’s been going on with pricing for almost two years.”

However, the Irish Farmers’ Association expressed dissatisfaction with the price cuts and warned of the potential impact of a ‘price war’ on dairy farmers.

Chair of the IFA’s liquid milk committee Keith O'Boyle said with production costs up greatly a price war could do untold damage to producers and risk the sustainability of fresh milk production in Ireland.

"There is real concern that a price war on milk could do untold damage to the farm families who specialise in producing fresh milk rather than milk which is manufactured into products with a longer shelf life," Mr O'Boyle said in a statement.

"There has been huge inflation in production costs for all farmers.

"However, those who specialise in fresh milk produce all year round, including over the winter months, have even higher costs.

"If these farmers don't get a return to cover the extra costs involved, they will change to producing milk for manufacturing.

"The number of farmers committing to supplying milk all year round has significantly declined.

"While consumers might see price cuts as a positive development it risks the medium to long term sustainability of fresh milk production in Ireland."

The reduction in own-brand milk prices comes after a period of record price inflation across the board.

Prices rose by 6.3pc in the year to April, the European statistics agency Eurostat and this country’s Central Statistics Office (CSO) said.

This was down slightly on the 7pc harmonised consumer price index increase recorded for this country in March, but it means costs continue to shoot up at a rapid rate for households.

Prices rose by 0.3pc in the month in this country, according to the statisticians. Food prices were up by almost 13pc in the State in the year to April, after rising by 0.5pc in the month.

Corporations boosting their profit margins have been cited by the likes of the European Central Bank and other authorities as one of the key factors behind high inflation levels.

CSO statistician Anthony Dawson said: “The latest flash estimate of the Harmonised Index of Consumer Prices (HICP), compiled by the CSO, indicates that prices for consumer goods and services in Ireland are estimated to have increased by 6.3pc in the past year and risen by 0.3pc since March 2023.”

Eurostat will publish flash estimates of inflation for the eurozone for April next Tuesday.

Persistent inflation across the eurozone means there is set to be another interest rate rise announced by the European Central Bank on Thursday.

Two more rate rises could be announced by the ECB by July, market commentators have said.