¶ Butter Price Drop and Shopper Reactions
Drive time on RTE Radio 1, sponsored by Zurich. Visit Zurich.ie to learn more. Drive time with Katie Hannon and Cullomo Mongoyne. Radio One. Now there's some rare good news for shoppers today. The price of butter is coming down with a reduction of nine percent across the Kerry Gold range. Supervalue and Centra announced the news this morning and now Tesco have entered the race with the same reductions.
But with food bills still far higher than they were a few years ago, is this a genuine turning point or just a drop in the ocean? Our reporter John Cook was out and about in County Clare today getting shoppers' reactions. They want to do more than butter. So they would, yeah, every week.
be twenty, thirty or extra. We haven't a big household really so butter wouldn't be you know, uh an issue in our house. Uh I haven't seen anything coming down to be honest with you. Prices have come down a little bit. Uh, just everything. I mean butter came down a bit, as as did some of the other things, but not an awful lot. They went up a lot but they didn't come down as much. But I do usually use the price of butter as a measure of the cost of things because uh yeah.
over something over four euro for a pound of butter is just shocking. Everything has gone up by about ten, if not twenty percent, over recent months and I find myself kind of cutting back on not even essentials but trying to squeeze as much out. of what I have as possible before I replace it. That last scrape. That's it, exactly. It it is, because I'll tell ya when you're trying to feed two teenage boys who
automatically go to the fridge and can eat a packet of something one go. It makes a big difference if you're saving a couple of cents. Well even like the smaller supermarkets one of the little shops announced that it had gone down eighty cent last week and that's quite a lot. It's one of the things that crept up and then it jumped. Had you noticed
I hadn't noticed at all. He just eats the pastry. You're managing the finances and the the the cookery. A lot of the baking goods and things like that are They crept up, but they are starting to come down again.
¶ Expert Analysis on Butter Price Decline
I'm also joined now by Dr. Oliver Brown, lecturer in accounting in UCC Business School. Oliver, uh just listening to people talking about butter there. Obviously people have noticed, because it did really go up sharply in the last few years, didn't it? Yes, so it's it's up uh eight percent in the past twelve months and in the past five years it's actually up forty eight percent.
So it's it's one of the real beacons of the cost of living crisis of you know, people have have really honed in on it and noticed the price of it, like the known value items that we kinda constantly see every week. So it's kind of one of those ones that has really shot up. And is it specifically the brand, the like the the brand everyone's like Kerry Gold? It's actually butter uh as a whole. So um I think that like the the brand is just a recognition name that we kinda see it and
I think most people who are cost conscious have probably stepped away from Kerry Gold for a while. It it is quite a bit more expensive than own brand butters for a relatively homogenous product. It's it's quite a bit of a of a difference in price, but the it's actually a symptom of a European oversupply. Uh, particularly of cream. Uh the price of the the wholesale cream per metric ton has come down significantly, meaning it's actually much cheaper now to make butter.
So we're down at four thousand euro metric tonne, which is that it's down about fifty percent since before Christmas even. So it's it's quite a sharp fall, making uh larger volumes at lower costs then because of that. Oh, so it's not it's not the supermarkets just picking uh, you know, a very eye catching product to draw in customers. It's because the actual The actual product itself has gone sharply down in price.
It always helps that it's a good brand name that they can they can put out there, but it's it's really because of the the overall cost of butter in the market, the European butter market has fallen through the floor. So it's it's it just means that, you know, they're passing on the costs that they're getting from
From the main supplier then. Right. Uh okay. So um when it comes to cuts like these, I mean As you say, it's y y it's often the bread or the milk or the butter that will be in the headlines if the if if a uh a price war begins. Um yeah, sorta. So like the the idea of this is that
They're known value items. They're things that p when people go to the shop every week, as some of the people said they're like it's it's one of the things that they use as a benchmark. They've used it as a benchmark for prices going up and it's it's a bit like that, you know, when when you thought years ago of a five euro pint And the you know, the five or a pound of butter, it's kinda getting close to that and now it's starting to come back down again.
So it when when we see them move, I think it's just the same as every other kind of big product that, you know, we've seen Supervalue do it today. Tesco followed not long after. We'll see the others follow across the course of the day. Um it's it's kind of that. constant sweep, but it it's not like they're dropping a s a all of their costs across all of different products.
It's very specific targeted items that don't cost them that much to to drop back down. And really they're only passing on a price. So it I don't think there's any appetite for a price war amongst the supermarkets at the moment.
¶ Broader Food Inflation Outlook
Um and that was my next question, uh because uh we w even though this is the butter has come down, overall food inflation is uh very slightly up s uh in the last month. i albeit uh i the rise seems to be slower, is there any indication that food inflation is is slowing or or or stopping or stalling?
Yes, it's it's roughly flat. It's it's kinda slowing down. What what what we're seeing is um in the language of them competing with each other, it's very much moved towards we have a certain amount and they signal the amount that they have for investment and it's, you know, cost cuts on own brand items where they have flexibility and margins.
I I don't see over the near to medium term a a significant drop in price, but at the same time I don't see a huge rise in price on the horizon either. I think that Where we might see a fall in prices is down to geopolitical stability. If there was an end to the war in Ukraine, then we would get a significant a country with a significant volume of production back up and running, as well as some stability in the market.
which might bring down prices. But overall if things keep going, it's we're down to the usual suspects of weather, you know, the the rain volumes, the yields for the season, how much sun we get. uh impacting prices kind of fluctuating over the seasonal uh periods. Okay. Okay. That's great. That's Dr. Oliver Brown there, lecturer in accounting at UCC business.