Tesco is to reduce the price of its own brand butter by 40 cent from Thursday, May 4th.
Tesco’s 454g butter (1lb) will now be priced at €2.99, down 40c from €3.39, and corresponding reductions will apply to all other Tesco own brand Irish creamery butter formats.
It comes after several retailers, including Lidl, Tesco, Aldi and Supervalu, cut the price of 2 litres of milk by 10 cents last week in response to the cost-of-living crisis.
“Following our reduction in retail milk prices in recent days, we are investing in butter retail prices to help customers with their household staple costs,” Natasha Adams, chief executive of Tesco Ireland said.
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“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,” she said.
Shortly afterwards, SuperValu announced its own brand butter would be reduced by 40c from €3.39 to €2.99 from Thursday 4th May.
Aldi will also be reducing their butter prices, with 454g (1lb) being cut to €2.99, and the 227g (half pound) to €1.85.
Lidl have also confirmed that their own brand of 454g butter will see a price reduction of 40c. Starting tomorrow, the product will be reduced from €3.39 to €2.99. Reductions of 14c in Lidl’s 227g packs of butter will also come into effect, leaving both the salted and unsalted version at a cost of €1.85.
Meanwhile, at Wednesday evening’s Fine Gael parliamentary party meeting, Taoiseach Leo Varadkar said the message to the retail sector is grocery prices must come down if their input costs come down.
He has asked Enterprise Minister Neale Richmond to bring forward the next meeting of the Retail Forum as soon as possible to ensure price reductions are passed on to consumers.
Mr Varadkar said it seems inflation peaked at about 10pc, is now at about 6pc and may average at 5pc this year. The meeting heard that price controls often lead to shortages and supply issues.
Colleagues also heard legislation regarding windfall tax on the energy sector will be law by the summer recess and will apply from September on profits made this year which will be used to help businesses and families with their bills.
The cut in butter prices is concerning for farmers, who were “working below the cost of production,” Tim Cullinan, president of the Irish Farmers Association (IFA) said.
“We understand the price of milk for farmers has fallen and it somewhere in the region of 50c a litre at the moment. That’s bringing its own pressures on the system. If you look at it since the Russian invasion of Ukraine, you will see massive price inflation on the cost of production. Looking at the price across the EU, we’re one of the highest costs in production at the moment,” he said, adding: “Now to see the price of produce falling is very worrying”.
[ Milk price wars could damage Irish dairy farmers, IFA warnsOpens in new window ]
It was leading to a “price war” with retailers, Mr Cullinan said. “We’re very concerned about the price that farmers are receiving for dairy produce at the moment”.
All of the own brand butter sold in Tesco Ireland is 100 per cent Irish, sourced from Irish farms, Tesco said. Tesco does not purchase directly from Irish dairy farmers but sources its milk and butter from processors.
The President of ICMSA, Pat McCormack, has called on corporate retailers to confirm that reductions in the price they charge for milk and butter will be “entirely” funded out of their own margins and will not be passed back to their supplier Co-ops.
“Farmers trying to get someone – anyone – in the state apparatus to look at the incredibly suspicious pricing of fertiliser in the last year will be amazed by the speed with which one query to the corporate retailers on their milk price gets that kind of response that very day”, Mr McCormack said.
Ged Nash, Labour’s spokesman for finance, public expenditure and reform, called on the Government to work with the Competition and Consumer Protection Commission to “stamp out ‘greedflation’”.
“It is the ordinary punters across Ireland who are paying the price for that at the till in terms of higher prices for bread, high prices for milk, high prices for eggs, products that are actually produced here,” he said in the Dáil. “I put it to the Taoiseach today that this is simply unacceptable. We are experiencing extraordinary circumstances at the moment, we need to see action from Government and the CCPC.”
