A barrage of price hikes in dairy products
Dairy products are soon expected to be sold at up to 10 percent higher prices. Consumers are in for price hikes as of October 1, for products such as cheese, creams, baby foods, yoghurt, desserts and fresh milk. The only product excluded from the list, at least for the time being, is pasteurized milk. It is the second price increase for some products in the same year. Dairy firms have already notified retailers of price hikes ranging from 2.3 percent to 5.6 percent for concentrated milk, 2.6 percent to 10.8 percent for highly pasteurized milk, 1.6 percent to 2.6 percent for baby milk and 4.3 percent to 5.9 percent for yoghurt. In the past two months, prices of cheese products were in effect increased, in some cases reaching up to 15 percent. Market experts say that such across-the-board price hikes are not a usual phenomenon in the dairy market, and express certain reservations about the consequences of the ongoing upward trend in Europe and beyond. The domestic dairy industry is facing significant pressures also on account of grain prices, while it must import milk since domestic produce is not sufficient to meet demand. The current retail price increases first appeared on cheese products and some yoghurt by-products, and it appears certain they will also have an impact on fresh milk. The price of branded fresh milk is already considered to be quite high. There is talk in the market that many dairy firms have adopted a wait-and-see stance, in anticipation of whether and when sector leader Vivartia will move to raise its prices, particularly of milk. This is a usual tactic in the market, as many smaller businesses cannot afford to be the first to announce price hikes for fear of seeing their market share drop. Increases are very likely to be announced even on private label products, both domestic and imported, whose appearance on the market helped keep the price of branded milk at considerably lower levels. And in view of certain existing agreements, it was believed that price hikes on such products would not surface until early next year. Undoubtedly, the price of fresh milk in recent years has risen quite significantly. According to data for the period from 2004 to the present, the price of fresh milk has risen by 14.16 to 18.52 percent and currently ranges from 1.29 to 1.58 euros per liter. In the same period, the price of highly pasteurized milk rose by up to 17 percent, with its current price between 1.29 and 1.43 euros. In the case of other, special types of milk, prices surged by up to 40 percent. Apart from the price increases, however, another interesting development relates to a long-awaited decision by the Competition Commission as to whether a milk cartel exists in Greece on not. Such a decision, say sources, is now only a matter of time. It is interesting to note, though, that while the dairy industry is dominated by a small number of large firms, certain smaller companies and private label products are starting to see growth of their market shares as a result of consumer preference.
