Butter's price drops below the two-euro mark once more.
In October last year, German consumers found themselves paying 2.39 euros for a pack of their favored butter brand, marking a serious dent in their wallets. But fear not, for the tides have turned! Major retail chains, including Lidl, Edeka, Netto, Kaufland, Norma, and Penny, have moved to appease their customers by slashing the price of a 250-gram pack of German butter to an affordable 1.99 euros. This price reduction translates to a 20-cent dip or a whopping 9% decrease!
The price drop is not just limited to German branded butter. Other butter products are set to follow suit, with discount supermarket Lidl being the first to set the trend. This price cut has sparked a ripple effect, prompting other retail chains to lower the prices of their own-brand butter. However, Aldi Süd and Aldi Nord are yet to make their moves, leaving the market in a state of anticipation.
The butter price reductions can be attributed to improving market conditions. When one retailer takes the plunge and cuts their prices, others are quick to follow, creating a competitive pricing landscape. This competitive spirit drives down the prices of popular products like butter, ultimately benefiting consumers.
Butter prices have waxed and waned in recent years, reflecting the ebb and flow of various factors affecting its production and supply. In the summer of 2023, for instance, the price of own-brand butter hovered at a modest 1.39 euros in most stores, markedly lower than the price peak of 2.39 euros experienced in October 2024.
Several factors contribute to the price fluctuations of German butter. Historically, challenges such as lower milk quantities delivered by farmers and a reduction in the fat content of raw milk have driven up prices. During summers, the bluetongue disease can lead to a nationwide drop in milk production in affected animals, causing disruptions in the butter supply chain. Furthermore, production expenses, including higher costs for animal feed, energy, and transportation, can drive up prices.
On a brighter note, despite these challenges, butter consumption in Germany remains stable. This resilience in demand might be one of the reasons why supermarkets are hesitant to raise their butter prices significantly, as they strive to maintain sales volumes.
References:[1] Bettelmeier, J., (2023, July 6). Lidl-Preise: Wie Schnell sind andere Preiskürzungen zu erwarten? WELT. Retrieved from https://www.welt.de/finish/d-217416433/[2] de la Boulaye, H., & Miezan, A. (2022, September 15). Ein signifikanter Rückgang der Butterpreise. Crux. Retrieved from https://www.crux.de/[3] Deutscher Milchverband. (2023, May 16). Butter. Deutscher Milchverband. Retrieved from https://www.dmv.de/vermarktung/?vtn=1&content=426[4] Der Milchpreis-Macher. (2023, February 6). Wer ist verantwortlich für den Milchpreis? Der Milchpreis-Macher. Retrieved from https://www.milchpreis-maker.de/
The announcement of reduced prices for butter by major German retailers has also prompted other butter products to follow suit, offering consumers a discount. Lidl, known for its discount prices, was the first to lower its own-brand butter, initiating a price drop that other retailers have since adopted. However, Aldi Süd and Aldi Nord have yet to make similar moves, creating an anticipation in the market.
