"Milk is cheaper than water"

At about half the price than in neighbouring countries, and even cheaper than mineral water: what is going on with the price of milk in Belgium?

Cheaper than water

The Belgian farmers are angry, now that supermarket chains Albert Heijn and Aldi are offering a stunt price of 0.55 euros for a litre of milk – at local Colruyt it is in some cases even less than half a euro. In the Netherlands, a litre of milk costs about 0.90 euros, in Germany the price is 0.72 euros, Belgian news channel Kanaal Z reports. Even worse: milk is now cheaper than bottled water.

The stunt prices come at a remarkable time, as almost all companies talk about the sharply rising prices for raw materials in their trading updates. Farmers’ Union Boerenbond is not pleased with the stunt prices: “It is clear that these players’ promotional stunts are applied to milk products independently of the market reality. This is unacceptable to us,” VRT NWS quotes the organisation. Its colleagues of Algemeen Boerensyndicaat even go a step further and threaten with hard actions.

It remains to be seen whether it will come to that: milk producers are, after all, very weak in price negotiations with supermarkets. “Milk is a generic product, which means that producers and suppliers are largely interchangeable for the customer (and the supermarket). And no differentiation by definition means no negotiating power”, retail expert Stefan Van Rompaey explains. Whether the farmers will see their demand for the end of milk price stunts granted, will therefore depend to a large extent on the goodwill of the supermarkets…