Prices, consumer interest in UK dairy rise

Dairy prices in the UK have risen in the past weeks on the back of a row over price fixing by the major supermarkets and dairy providers in 2002-2003.

The Office of Fair Trading has claimed that the retail prices of dairy products such as milk, cheese and butter were fixed, and includes Tesco, Morrisons, Sainsbury’s, Dairy Crest, Arla Foods and Robert Wiseman in its charge. These price fixes could have cost consumers more than a quarter of a million pounds over two years.

Prices have risen again this year, prompting supermarkets such as Sainsbury’s to post signs in its dairy section to assure consumers that the price hikes are not simply a result of profit-taking. Robert Wiseman Dairies has reportedly made a similar statement.

The price hike comes as news emerges that British consumers are opting for local cheeses such as Red Leicester, Cheshire and Lancashire in place of French Brie and Camenbert.

The amount spent on continental cheeses fell 7% between 2004-2006, according to market research firm Mintel, while purchases of regional British cheeses rose 16% over the same period. However, the overall amount of money spent on traditional Continental cheeses was ₤120m more.

Continental dairy products may suffer further, as France’s Milk Producers Association has announced that the prices paid to producers will rise by one-fifth in the last quarter of this year. These hikes are related to tensions in the European markets, owing to “a relative disaffection among milk producers in Europe following repeated decreased in prices,” says the association.

The association told Just-Food that a similar trend can be expected in the first half of 2008.