In the European Union, consumer prices of dairy products have risen significantly. The level of increase varies considerably between member states.
The countries that stand out the most are Germany and France. Where prices rise the most in Germany, inflation lags behind in France. Dutch dairy prices are rising faster than the European average. The rise in the price of cheese (19.1%) will be particularly noticeable in the Netherlands, as half of all Dutch milk is processed into cheese.
Of all dairy products, the price of butter is rising the fastest. The German consumer sees the cost of the product increase the most, paying 47.9% more than in July 2021. French butter rose by only 13.2%. The Dutch butter price is one of the biggest increases and is 35% higher than last year.
The rise in dairy prices is the result of the rise in milk prices, higher packaging costs and rising energy bills. The reason why the rise in dairy prices varies so much from one member state to another is that the markets in European member states vary considerably. For example, Germany has more short-term contracts for the production of butter than France. This allows the price to be adjusted quickly.
Where in Germany butter is bought from large discount brands, in France it is mainly about consumption of local butter. However, this is changing rapidly. Due to high inflation, more and more French consumers are opting for cheaper house brands. As a result, the French consumer is less affected by the price increases.
The trend of ‘downtrading’ is not unique to France. Consumers across Europe to switch from A-Brands to house brands for their basic needs. Consumers will more often leave luxury products such as snacks and cheese on the drinks shelf.