# Milk price fixing - is it a cartel?



## MrKeane (29 Jun 2007)

I have been buying about 10 litres of milk for the last few years since my kids arrived. "Own brand" milk has always been €1.19 in Dunnes, Lidl and Tesco. I went to Lidl the other day and it had gone up to €1.29. Suprise, suprise when I went to Dunnes this evening it had gone up to €1.29 as well, what a coincidence.

Is this practice legal?


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## ClubMan (30 Jun 2007)

Anybody know if _Aldi _(who also had it at €1.19 per 2L if I recall correctly) and _Tesco _have followed suit?


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## Brendan Burgess (30 Jun 2007)

The supermarkets monitor each other's prices and move them up and down accordingly. It is perfectly legal. 

If they sit down beforehand and agree a particular price, it would be a criminal offence. 

Brendan


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## room305 (30 Jun 2007)

To be fair rising milk prices are definitely part of a global phenomenon. It would be strange if they didn't go up. The rising cost of corn, which has been driven by the bio-ethanol drive of the Bush administration, is feeding into many other areas including dairy products.

[broken link removed]


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## ClubMan (30 Jun 2007)

I presume that the fact that even €1.29 for 2L of milk is significantly less than many retailers is pertinent too? If there was price fixing going on then presumably everybody would charge the top price? One local shop around our way was charging about €1.20 for *1*L! And if you buy those 250ml cartons then you'll probably pay the equivalent of about €2 per litre!


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## Askar (30 Jun 2007)

The Competition Authority investigated the milk industry in the late nineties and referred a file to the DPP. No action was taken. The only conclusion that can be drawn from this was that the CA believed it was an industry that required investigation. 

You will note that in Dublin the brands (Premier and Avonmore) in the supermarket are owned by the same company, and both appear to have different prices. There also appears to be a floor price on own brand 2l milk in the main supermarkets. While you might pay 3 different prices for the same 2l milk in a supermarket, it may well be the case that this milk comes from the same supplier - and this supplier is catering to the different price sensitivities of the consumer. I suppose the question is why does this supplier supply the majority of milk to the Dublin market, while other suppliers appear to have their own geographic territory.


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## ClubMan (30 Jun 2007)

Doesn't _Aldi/Lidl _(and other?) own brand milk come from _NI_? Whatever happened to _Strathroy _milk? That used to sell in a lot of smaller local _Dublin _shops for £0.99/2L years ago (c. €1.26 in nominal terms and more in real terms if adjusted for inflation!).


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## ClubMan (30 Jun 2007)

Just checked this evening and _Tesco _have also increased their price to €1.29/2L.


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## ClubMan (1 Jul 2007)

Any chance that [broken link removed] has something to do with recent retail price increases?


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## Brooklyn (1 Jul 2007)

Having been close to skint for many of the past several years, I've kept a fairly close eye on prices at supermarkets and I've found that Dunnes and Tesco have exactly the prices - down to the penny - for about 95% of their products.  It's got to be deliberate, there's no way it could be a coincidence.


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## Brendan Burgess (1 Jul 2007)

Brooklyn

Of course it is deliberate. That is what competition is about. They try to match each other's prices. Each tries to be the lowest. Since Aldi and Lidl entered the market, the competition got even tougher. 

Brendan


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## ClubMan (1 Jul 2007)

Brooklyn said:


> Having been close to skint for many of the past several years, I've kept a fairly close eye on prices at supermarkets and I've found that Dunnes and Tesco have exactly the prices - down to the penny - for about 95% of their products.  It's got to be deliberate, there's no way it could be a coincidence.


If there was something dodgy going on here then why would they not simply fix prices at the higher levels charged elsewhere?


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## RainyDay (1 Jul 2007)

SWMBO tells me that M&S milk is cheapest at the moment. I'm not sure of the exact figures.


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## ninsaga (1 Jul 2007)

Its surprising that the media hasn't latched onto this - it has just sneeked in.

ninsaga


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## Jools600 (1 Jul 2007)

I can confirm that M & S milk is alot cheaper than the other supermarkets which are charging an average at about €1 per litre. M & S charge as of Friday 69p per litre.


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## CCOVICH (1 Jul 2007)

Jools600 said:


> I can confirm that M & S milk is alot cheaper than the other supermarkets which are charging an average at about €1 per litre. M & S charge as of Friday 69p per litre.



Eh?  69p is more than €1.  Do you mean that M&S milk is 69c?


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## ClubMan (1 Jul 2007)

Jools600 said:


> I can confirm that M & S milk is alot cheaper than the other supermarkets which are charging an average at about €1 per litre. M & S charge as of Friday 69p per litre.


Do you mean €0.69/L? If so then that's €1.38/2L which is still dearer than _Dunnes/Tesco/Lidl _who not sell own brand milk at €1.29/2L. I presume _Aldi _are the same but haven't checked yet.


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## MrKeane (1 Jul 2007)

Milk has been €1.19 for a long time, maybe 4 years or more based on my kids age, so a rise of ~8.5% is not that much given the nature of inflation in recent years.

Whats annoying is that after all of the hype of the groceries order being abolished the "price war" has not really materialised.


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## ClubMan (2 Jul 2007)

MrKeane said:


> Whats annoying is that after all of the hype of the groceries order being abolished the "price war" has not really materialised.


The _Grocery's Order _only prevented below cost selling. Not too many retailers are going to sell below cost generally or indefinitely otherwise they would go out of business.


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## Jools600 (2 Jul 2007)

My apologies to all.
I can confirm it is 69c and NOT 69p..I have  checked it on my receipt from the shopping I did at the weekend.
Thanks


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## ubiquitous (2 Jul 2007)

MrKeane said:


> Whats annoying is that after all of the hype of the groceries order being abolished the "price war" has not really materialised.



The Groceries Order never covered milk or other perishable foodstuffs.


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## ClubMan (2 Jul 2007)

Jools600 said:


> My apologies to all.
> I can confirm it is 69c and NOT 69p..I have  checked it on my receipt from the shopping I did at the weekend.
> Thanks


So _M&S _milk is more actually expensive than _Dunnes/Tesco/Lidl _(and probably _Aldi_) after all...


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## CCOVICH (2 Jul 2007)

ClubMan said:


> Do you mean €0.69/L? If so then that's €1.38/2L which is still dearer than _Dunnes/Tesco/Lidl _who not sell own brand milk at €1.29/2L. I presume _Aldi _are the same but haven't checked yet.


 
Is the price for a 2L carton the same as the price for 2 X 1L cartons? I wouldn't have assumed that it was.


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## ClubMan (2 Jul 2007)

It definitely was in _Tesco _up to recently - €1.19/2L or €0.60/1L. I presume that this is €1.29/2L or €0.65/L now. I think _Dunnes _is the same. _Lidl _and _Aldi _only sell 2L as far as I know. All own branded milk by the way.


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## Trafford (2 Jul 2007)

ClubMan said:


> So _M&S _milk is more actually expensive than _Dunnes/Tesco/Lidl _(and probably _Aldi_) after all...


 
Presumably because the milk is being imported from the UK. We should support our own dairy industry anyway. The dairy farmers have seen their price earned per litre drop steadily, while the shops appear to be increasing it. All the shops do in the whole chain is provide the refrigeration. The milkman working for the Co-op delivers it to the shops, AND stacks it on the shelves. The shopkeeper only gets to handle it when scanning it and getting the huge mark-up placed on it!


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## ClubMan (2 Jul 2007)

Trafford said:


> Presumably because the milk is being imported from the UK.


As far as I know _Lidl _and _Aldi _import their milk from the _UK _too. _NI _to be specific.


> We should support our own dairy industry anyway.


 Will dairy farmers buy the software that I write if times get tough for me? Doubt it... I prefer to shop for value for money.


> The dairy farmers have seen their price earned per litre drop steadily, while the shops appear to be increasing it.


 As mentioned above retail milk prices seem not to have increased for a long time now. As I mentioned earlier 2L of _Strathroy _(_NI_) milk used to sell at £0.99 years ago when cheaper milk started appearing in (_Dublin _at least) local shops - that's €1.26 in nominal terms and more in real terms so your claim about retail milk price inflation may not be true.


> All the shops do in the whole chain is provide the refrigeration. The milkman working for the Co-op delivers it to the shops, AND stacks it on the shelves. The shopkeeper only gets to handle it when scanning it and getting the huge mark-up placed on it!


 So what? They are providing a service and where else are people supposed to buy milk other than from a supermarket or their local shop? Not too many areas are served by milk deliveries these days.


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## Markjbloggs (2 Jul 2007)

Everyone knows that Ernie drove the fastest milk cartel in the west....


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## RainyDay (2 Jul 2007)

Trafford said:


> Presumably because the milk is being imported from the UK.



I'm pretty sure that it wasn't imported (though I don't have any in the fridge at the moment to double-check). I've been surprised at seeing quite a few of the M&S fresh foods coming from Irish suppliers.


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## AJC (3 Jul 2007)

€1.19 for 2L in my local _GALA _last evening...


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## ubiquitous (3 Jul 2007)

ClubMan said:


> _We should support our own dairy industry anyway._.
> Will dairy farmers buy the software that I write if times get tough for me? Doubt it... I prefer to shop for value for money.



All other things being equal (including price), it makes sense to support Irish producers by buying their produce instead of imports. 



ClubMan said:


> As mentioned above retail milk prices seem not to have increased for a long time now.


Not surprising really, as farmers are receiving less per gallon for milk at the farm gate than they received 20 years ago, even in nominal terms (ie without adjusting for inflation). How long this particular trend can last, I don't know...


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## ClubMan (3 Jul 2007)

ubiquitous said:


> All other things being equal (including price), it makes sense to support Irish producers by buying their produce instead of imports.


Personally I buy what I like at the level of quality and price that meets my needs. If it happens to be _Irish, _well and good. But I don't go out of my way to "buy _Irish_".


> Not surprising really, as farmers are receiving less per gallon for milk at the farm gate than they received 20 years ago, even in nominal terms (ie without adjusting for inflation). How long this particular trend can last, I don't know...


True - retail margins have probable increased but, as far as I can see, retail prices may not have done so to the extent suggested earlier. In fact in real terms they may have fallen over certain periods of time.


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## Jools600 (3 Jul 2007)

I was actually comparing 1L milk like for like in Dunnes/Tesco etc. 
As I said M&S is 69c for 1 L compared to Avonmore etc in Dunnes which is about €1. So it is cheaper.
Also for comparison purposes M&S milk is €1.19 for 2L compared to Dunnes own brand which is €1.30 or Avonmore also in Dunnnes which is €1.60.


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## ClubMan (3 Jul 2007)

Jools600 said:


> Also for comparison purposes M&S milk is €1.19 for 2L


If that is still the case then they are pretty cheap alright.


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## ClubMan (3 Jul 2007)

ClubMan said:


> If that is still the case then they are pretty cheap alright.


Just popped into _M&S _earlier and indeed it is - €0.69/1L but €1.19/2L and €1.79/3L.


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## Trafford (4 Jul 2007)

ClubMan said:


> As far as I know _Lidl _and _Aldi _import their milk from the _UK _too. _NI _to be specific.
> Will dairy farmers buy the software that I write if times get tough for me? Doubt it... I prefer to shop for value for money.
> As mentioned above retail milk prices seem not to have increased for a long time now. As I mentioned earlier 2L of _Strathroy _(_NI_) milk used to sell at £0.99 years ago when cheaper milk started appearing in (_Dublin _at least) local shops - that's €1.26 in nominal terms and more in real terms so your claim about retail milk price inflation may not be true.
> So what? They are providing a service and where else are people supposed to buy milk other than from a supermarket or their local shop? Not too many areas are served by milk deliveries these days.


 
It just seems the shops get the majority of the profit, and do none of the work, not even stack the shelves!

What sort of software you got Clubman? As large dairy farmers who rely by and large on computerised systems, we might indeed be interested. Although with the price we get per litre of milk produced, you might be outside our budget. If only more people in Ireland supported our industry we might have increased profit margin, allowing us to support other indigenous business people....


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## ClubMan (4 Jul 2007)

Trafford said:


> It just seems the shops get the majority of the profit, and do none of the work, not even stack the shelves!


What about all the overheads involved in running a shop/supermarket!?


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## cork (8 Jul 2007)

MrKeane said:


> Milk has been €1.19 for a long time, maybe 4 years or more based on my kids age, so a rise of ~8.5% is not that much given the nature of inflation in recent years.


 
Milk is one of the cheapest and most nourishing foodstuffs around.

Bottled water and sugery fizzy drinks are far more expensive.


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## ClubMan (9 Jul 2007)

Indeed - but not exactly pertinent to the original query?


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## ubiquitous (9 Jul 2007)

cork said:


> Milk is one of the cheapest and most nourishing foodstuffs around.
> 
> Bottled water and sugery fizzy drinks are far more expensive.





ClubMan said:


> Indeed - but not exactly pertinent to the original query?



I think the point is relevant, and well-made. People for some reason are acutely price-conscious when it comes to milk but are blissfully ignorant of prices and price trends for bottled water, fizzy drinks and (God help us) smoothies, and seem happy to pay almost any price for these latter products. I wonder why this is the case?


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## ClubMan (9 Jul 2007)

How exactly is the price or nutritional content of fizzy drinks or smoothies relevant to this?


MrKeane said:


> I have been buying about 10 litres of milk for the last few years since my kids arrived. "Own brand" milk has always been €1.19 in Dunnes, Lidl and Tesco. I went to Lidl the other day and it had gone up to €1.29. Suprise, suprise when I went to Dunnes this evening it had gone up to €1.29 as well, what a coincidence.
> 
> Is this practice legal?


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## ubiquitous (9 Jul 2007)

Okay -  if you want to hijack the discussion with a debate on semantics, go ahead and please yourself. I'm certainly not going to submit myself to cross-examination (ie "how exactly...") from you or anybody else in relation to this discussion. If people insist on butting in and attempting to control the course of a discussion, there is little point in anyone bothering to contribute.


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## Trafford (10 Jul 2007)

ubiquitous said:


> Okay - if you want to hijack the discussion with a debate on semantics, go ahead and please yourself. I'm certainly not going to submit myself to cross-examination (ie "how exactly...") from you or anybody else in relation to this discussion. If people insist on butting in and attempting to control the course of a discussion, there is little point in anyone bothering to contribute.


 

To whom are you referring?


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## ClubMan (10 Jul 2007)

Trafford said:


> To whom are you referring?


Me.


ubiquitous said:


> Okay -  if you want to hijack the discussion with a debate on semantics, go ahead and please yourself. I'm certainly not going to submit myself to cross-examination (ie "how exactly...") from you or anybody else in relation to this discussion. If people insist on butting in and attempting to control the course of a discussion, there is little point in anyone bothering to contribute.


Not semantics. This thread is about the price of milk - not the price or nutritional content of bottled water or fizzy drinks. Feel free to open a new thread on those issues if you like. Otherwise...


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## Protocol (10 Jul 2007)

The milk price rise isn't a cartel.

It's just general inflation, after several years at 1.19 for 2 litres.


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## Protocol (10 Jul 2007)

Doctors, accountants, some solicitors, medical consultants, publicans, now they are all cartels!!


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## ubiquitous (11 Jul 2007)

Protocol said:


> ... accountants, .... now they are all cartels!!



Explain please? Unlike the other occupations you mention, one can open up an accountancy business and call oneself an accountant, without any need for either a cent in financial resources or any sort of educational qualification. Not exactly the classic signs of a cartel in my book...




Protocol said:


> ...*some* solicitors, ... now they are all cartels!!


A contradiction in terms, I would have thought? A cartel cannot exist unless *all* the operators in the market conspire to participate in it. If only *some* do, then by definition there is competition in the market, and hence no cartel exists.


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## ubiquitous (11 Jul 2007)

ClubMan said:


> Me.
> 
> Not semantics. This thread is about the price of milk - not the price or nutritional content of bottled water or fizzy drinks. Feel free to open a new thread on those issues if you like. Otherwise...



My own comment was well on topic. I will repeat it for your benefit.



> People for some reason are acutely price-conscious when it comes to milk but are blissfully ignorant of prices and price trends for bottled water, fizzy drinks and (God help us) smoothies, and seem happy to pay almost any price for these latter products. I wonder why this is the case?


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## MrKeane (11 Jul 2007)

ubiquitous said:


> I think the point is relevant, and well-made. People for some reason are acutely price-conscious when it comes to milk but are blissfully ignorant of prices and price trends for bottled water, fizzy drinks and (God help us) smoothies, and seem happy to pay almost any price for these latter products. I wonder why this is the case?


 
I doubt you have 2 young kids so. At their "peak" of guzzling milk we would go through maybe 20 litres of milk a week. There is a lot of hassle involved in keeping milk in the fridge. It has been known to run out at 4am and I have had to drive 8 miles to the nearest 24 hour shop, obviously price is not a factor at this point.

How many families of 4 would consume 20 litres of Coke in a week? Coke that goes off after a few days? Coke that must be kept in the fridge and takes up half the space in it?

We rarely buy soft drinks but if I had a need to buy 20 litres of Coke every week which went off after a few days then yes I would be very price wary of it.


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## ubiquitous (11 Jul 2007)

MrKeane said:


> I doubt you have 2 young kids so. At their "peak" of guzzling milk we would go through maybe 20 litres of milk a week. There is a lot of hassle involved in keeping milk in the fridge. It has been known to run out at 4am and I have had to drive 8 miles to the nearest 24 hour shop, obviously price is not a factor at this point.



Funny enough, now that you mention it, we do have 2 young kids (still preschool), one of whom displayed dairy allergy symptoms when he was a baby so he and his brother now drink goats milk, which costs €2.70 a litre, AND we have to drive about 5 miles out of our way to a particular shop to buy it, often at unsociable hours. (24 hour shops and service stations never stock goats milk).

Between them, our children drink up to 10 litres of goats milk per week. Of course its expensive but its well worth it once the kids are healthy. In fact, we're bloody glad to be able to buy it if and when we can. I personally don't have a particular gripe about the price of the stuff, and I think the €25 or so that we spend on goats milk every week is very good value compared to the €15 or so that we spend on the occasional times that we bring the kids to smoothie bars or some of the nicer coffee shops, or indeed the €€€ we fork out on mum 'n dad's once-in-a-blue-moon outings to the local pub.


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## Sue Ellen (6 Oct 2007)

MrKeane said:


> I have been buying about 10 litres of milk for the last few years since my kids arrived. "Own brand" milk has always been €1.19 in Dunnes, Lidl and Tesco. I went to Lidl the other day and it had gone up to €1.29. Suprise, suprise when I went to Dunnes this evening it had gone up to €1.29 as well, what a coincidence.
> 
> Is this practice legal?



Noticed this evening that Dunnes have now raised the price to €1.49 from €1.29.  Quite a hike in price for any families with a few young children.


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## Gypsy girl (7 Oct 2007)

Tesco price for 2lt Milk now €1.49 also! Quite a hike I thought.


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## dontaskme (7 Oct 2007)

milk prices are increasing across Europe. According to some measures they have increased 50% in Germany. The apparent reason is demand from China and other developing countries. This follows increases in many other commodity prices over the last few years.


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