Supermarkets Lidl and Aldi are cutting 10c off their standard own-brand two-litre cartons of milk.

The move will spark fears among farmers that milk will once again be used as a major loss leader by retailers to entice shoppers into their stores.

Farmgate milk prices have fallen by around 10-15c/l since January.

Lidl said it was “committed to helping customers throughout this cost of living crisis” and it was “happy to be the first grocer to pass on savings for all of our fresh, Irish milk”.

Lidl’s milk price cut will come into effect on Saturday 29 April and the supermarket, announcing its move, said it would pass €2.7m in savings to its customers.

Lidl’s own-brand milk is branded Coolree Creamery.

Its one-litre Coolree Creamery cartons are supplied by Arrabawn, while its Its two-litre and three-litre Coolree Creamery cartons are supplied by Strathroy in Omagh, Northern Ireland.

Aldi follows suit

Aldi confirmed to the Irish Farmers Journal on Friday evening that it too will reduce prices of its full milk range from Tuesday next, 2 May.

A spokesperson for Aldi said the price of its two-litre range will reduce by 10c.

Milk as a loss leader

Fresh milk in Irish supermarkets has traditionally been used as a loss leader product. Essentially this means that retail fresh milk prices were kept low, and didn’t rise, to entice customers into shops.

Last year, 2022, was the first time in many years when the retail price of fresh milk rose in supermarkets. At various stages throughout the year retail milk price actually rose as the value of dairy commodities rose.

The majority of milk in Ireland is dried down and converted into cheese, powder and butter and exported out of Ireland. Fresh milk for drinking has traditionally been supplied from farms near cities and towns. There are about 1,500 milk suppliers that have some volume of a liquid milk contract which means they supply milk right through the winter, and milk cows all year round.

Tirlán, Aurivo, Lakeland, Strathroy Dairies, Dale Farm, Clóna, North Cork, Lee Strand, Green Pastures and Thurles Centenary are the main processors supplying fresh milk in Ireland.

The latest move to rationalise the liquid milk sector was the sale of the Arrabawn bottling facility to Aurivo.