A market situation report this week from the EU Commission in Brussels has concluded that supermarkets are failing to pass on recent falls in dairy product prices to their customers and therefore delaying possible recovery in the dairy sector.
According to their report “The pronounced fall in the prices of milk and dairy commodities since the end of 2007 has only triggered a slight decline in consumer prices for dairy products.”
It says “The magnitude, the delay and asymmetry in the downward adjustment of dairy consumer prices clearly shows that the EU dairy supply chain does not function efficiently,”.
The commission’s figures show that despite wholesale mik prices dropping by 31%, skimmed milk powder by 49%, and butter by 39% the price consumers pay for dairy products in supermarkets has dropped by only 2%.
“Preventing consumers from benefiting from lower prices constrains the development of demand for dairy products and thus hinders the strength and pace of recovery.”
More information can be found here.