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Inflation is being seen across both own label and branded milks

Soaring farmgate milk prices and other costs are increasingly translating into higher retail prices across liquid milk, research by The Grocer shows.

Analysis of Assosia data for the 52 weeks to 22 November reveals there were 443 price increases across the liquid milk category in the big four, Waitrose, Aldi and Lidl – 58.8% more than the corresponding previous 12 months.

Liquid milk saw 168 price increases (representing 38% of the past year’s total) during the past 12 weeks, indicating an acceleration of inflation since the summer.

The category’s bellwether four-pint bottles reached £1.15 or higher by October (against a £1.09 average earlier this year), but price inflation is now being seen across both own label and branded SKUs.

Among the standout hikes are a 10% increase, from £1.50 to £1.65, in the price of a one-litre carton of Arla’s Lactofree in Tesco, Morrisons and Waitrose since 25 October. With the SKU’s price also rising from £1.40 to £1.50 in Tesco and Waitrose over the summer, it means Lactofree is now 17.9% more expensive in the two retailers than it was just six months ago.

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Other products to have experienced price increases include Arla’s BOB milk, up from £1.80 to £1.90 for a two-litre bottle in Tesco, from £1.65 to £1.90 in Asda and from £1.90 to £2 in Sainsbury’s. Elsewhere, Arla’s Yeo Valley milk has seen price hikes across its 1l and 2l SKUs of between 5p and 10p over the past four weeks across the big four, while Waitrose increased the cost of the two SKUs by 15p and 25p respectively.

Smaller own label milk SKUs have also seen price increases. Tesco and Sainsbury’s hiked a pint of Organic milk by 10p to £1.15 last month, and a standard pint rose from 80p to 89p.

Earlier this month The Grocer reported that average farmgate milk prices at 31.37ppl for August, [AHDB]) were already at their highest since the summer of 2018 and were expected to increase further by the new year.

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Arla was the latest to announce price hikes this week when it revealed it would impose a “record” increase of three euro cents from 1 December, taking its conventional farmgate milk price to 36.68ppl and 44.13ppl for organic.

The price hikes were “needed at a time of significant inflationary pressure impacting on-farm costs and milk production”, said Arla Foods UK MD Ash Amirahmadi. “We are working closely with our customers to secure the continuity of supply to meet demand leading up to Christmas as well as a continued supply of sustainable dairy into 2022 and beyond,” he added.

It followed an announcement by Freshways at the start of November that it would impose a 3ppl increase to 33ppl in its January price at the start of November, while Müller announced last week it would increase its price by 2ppl to 32ppl, citing “increased inflationary pressure” across supply chains.

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