Following widespread falls in the price of milk across the main supermarkets over the weekend, consumers in a number of supermarket chains will also now benefit from a drop in the price of butter.
From tomorrow morning, Tesco Ireland said it will cut the cost of its own brand butter by 40c per 454g pack (one pound), pricing it at €2.99 - down from €3.39.
Aldi has also announced that it will cut the cost of its own brand butter from tomorrow morning.
It has confirmed that it will drop the retail price of one pound of butter by 40c. It will now sell at €2.99.
Other butter products will also reduce in price accordingly.
Meanwhile Lidl has also confirmed a 40c cut in the price of its own-label butter commencing tomorrow morning. One pound of butter in Lidl will now sell at €2.99.
The retail price of SuperValu's 454g own brand butter will reduce by €0.40c tomorrow. This will see the cost go from €3.39 to €2.99.
Last Friday evening, the first cut in milk prices was announced by Lidl Ireland and over the following hours, the other main supermarkets also announced cuts in retail milk prices.
It is more good news for consumers who have been forced to endure rates of food inflation that far exceed the general rate of inflation in Ireland.
Figures from Kantar released yesterday show food inflation has turned, but still sits at 16.6% in the three months to 16 April.
However, the move is likely to annoy farmers who say price reductions for dairy products puts further downward pressure on the price they are paid for their raw milk.
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IFA, ICMSA express concern over price cut
The President of the Irish Farmers Association said the organisation is concerned that the reduction in butter prices "is going to lead to a price war".
Tim Cullinane told RTÉ's Drivetime that "we have seen this time and again before, retailers fighting for their share of the market and using fresh produce, whether dairy, vegetables, or meat, to command a higher amount of that market place."
He said he would not "begrudge struggling families a break" but questioned "why is it (the price cut) always on fresh produce ... why don't they look at their dry goods and decrease the price of those."
Mr Cullinane said that from a farmers point of view, it is important to remember the cost of production has "increased substantially over the last year - in the region of 50% - and maybe a marginal decrease but very, very little compared to the reductions seen across Europe."
The President of the Irish Creamery Milk Suppliers Association (ICMSA) called on retailers to confirm that reductions in the price they charge for dairy products will be "entirely" funded out of their own margins and not be passed back to suppliers.
Pat McCormack said there must be a move from what he called "opaque" margins in the food supply chain and that the Government must work out who was getting what.
"Every farmer in Ireland is monitored at State level and every cent of inputs can be calculated while our milk price is announced publicly on a monthly basis. The difference when we step through the doors of the supermarkets could not be starker.
"No-one seems to know for sure how they put their margins together and the state agencies seem to operate on the basis that their job is to not ask any awkward questions about who is ultimately paying for these price reductions or special offers."
