Inflation pushes butter price up in UK’s cost-of-living crisis

Bloomberg

The cost of Lurpak butter is emerging as the new flash point in Britain’s cost-of-living crisis, requiring security tags in stores and spawning a controversy that’s placed its owner, Arla Foods, on the defensive.
“We understand that recent inflation in food prices is hitting many households really hard,” an Arla spokesperson said by email after the dairy firm’s Lurpak brand got lambasted on
social media in recent days. “Unfortunately, our farmers are facing a similar situation with prices for the feed, fertiliser and fuel they need to produce milk, all rising significantly.”
The cost of a 500-gram (1.1-pound) tub of the dairy giant’s spread has climbed 30% at Morrisons since the end of January, and almost as much at rivals J Sainsbury Plc and Asda, according to the retail research firm Assosia. Buying in bulk isn’t much more economical: A 1 kg portion sells for £9 ($10.80) at online retailer Ocado.
The dairy staple is turning into a luxury item after inflation hit the highest level in four decades in the UK, denting
consumers’ spending power. To deter thieves, some supermarkets are opting to stamp the tubs with security tags.
One supermarket operator, Iceland Foods, said companies such as Arla need “to change the expectations on what their brands are worth.”
Arla responded by saying farmers face similar challenges and must make a living too. “While we don’t set the prices on the shelves, we do work closely with the retailers to ensure our farmers receive a fair price for the milk they produce,” it said in a statement.
Soaring prices have shoppers turning to cheaper brands and tightening their spending. Earlier this year Tesco Plc Chairman John Allan said that cash-strapped shoppers are asking the grocer’s checkout staff to stop when they hit £40 before putting the rest of their goods back on the shelves.
Iceland, a frozen-foods specialist, says it has 170 store-brand items in the chilled section and will introduce 50 more this month to offer customers more affordable alternatives. The crisis is straining relations between supermarkets and suppliers as grocers try to resist passing higher prices onto shoppers.
Both Kraft Heinz, maker of ketchup and baked beans, and confectionery company Mars have found themselves in tussles with Tesco over price increases the supermarket chain has called “unjustifiable.”