DairyCo

UK Retail Prices

Published 25 August 10

UK Retail Prices

UK Dairy Product Retail Prices

• The average price of liquid milk sold through a retailer fell by 9p to £1.33 for four pints in August 2010, 12% cheaper than August 2009.
• Fresh cream and butter prices increased in August, with both products priced higher than a year ago, although discounts and promotions have somewhat distorted month on month comparisons.
• Mild Cheddar prices are considerably higher than a year ago and on average £210 per tonne higher than September 2009.

In August, liquid milk prices fell as supermarkets competed to sell the cheapest milk, with much of the focus on 1% milk. Discounting of lower fat milks has been taking place for many months but in August, this seems to have spilled over into a wider category of liquid milks with Asda selling whole, semi-skimmed and skimmed milk on offer at two 4-pint containers for £2.  So far, Tesco, Sainsbury and Morrisons have not followed.  But in the lower fat% sectors, Tesco reduced the price of 3litres of 0.75% milk to 75p in July. By August, the price of 1% fat milk ranged from 12.5p/pint in Morrison's to 14p/pint in Tesco (for 0.75% milk), to 25-26p/pint in Asda and Sainsbury's.  These prices compare to 38p/pint for 4pints of semi skimmed milk, without discounts. Currently, semi skimmed milk is at its cheapest since 2007.

Fresh cream prices rose in August to 185p/600ml, as promotions stopped. Excluding promotions, the price of fresh cream had been unchanged from May 2008 to July 2010 at 168p/600ml.

Butter prices also increased, although there was a wide spread of prices with Asda selling most brands of butter at lower prices than its competitors. Prices have been fluctuating over the past seven months with a high level of temporary price discounting. Overall Country Life prices in August were £1,160/t up on a year ago compared to a £1,300/t lift in wholesale prices.

Mild Cheddar prices were unchanged from July. Tesco and Asda have maintained 'multibuy' promotions on both Mild and Mature own label Cheddar, selling two 500g blocks for £5. Prices are significantly higher than a year ago but this is partly due to price promotions in August 2009. Average Mild Cheddar prices are £210/t higher than September 2009 compared to a £300/t increase in wholesale prices. Branded Mature Cheddar prices vary considerably between retailers and from month to month making it difficult to discern trends. Although prices were lower than a month ago, there doesn't seem to have been any sustained long-term price changes since 2007.

Source: Various 

UK Dairy Product Retail Price Indices

The RPI in July 2010 fell by 0.2% on the previous month and was up by 4.8% compared with 12 months earlier. The butter index in July 2010 fell by 5.7% after increasing by 5.5% in the previous month. It was 7.1% up on July 2009. After falling for the previous three months, the cheese price index was 3.6% up month on month in July and was 5.1% higher than in July 2009. The fresh milk index fell marginally for the second month in a row in July and was 0.8% below the level of a year earlier.

Source: National Statistics Office