Supermarkets hike milk prices – and a bargain grocer has increased costs by 16%

SUPERMARKETS have raised milk prices above the level of inflation, heaping more pressure on hard pressed families struggling with soaring food bills.

Sainsbury’s was the first supermarket to push up prices with two pints of milk increasing 10% from £1.05 on Friday to £1.15 on Saturday.

Other supermarkets have quickly followed with Asda, Morrisons and Aldi all now selling the same size milk for £1.15.

Discounter Aldi has increased the price of two pints of semi skimmed from 99p to £1.15 – a 16% rise and beyond the current 9.1% rate of consumer price inflation.

It is understood that Tesco typically makes changes to its prices on Wednesdays.

The hikes could add extra to grocery bills, hitting families with young children hardest.

Milk prices have become touch paper for the grocery industry because milk is one of the most commonly bought items by shoppers but farmers have complained they are facing rocketing costs of feed, fertiliser and fuel that has meant they are close to going broke.

The boss of Arla, the dairy giant that produces 3.3 billion litres of milk a year in the UK and owns Lurpak, Cravendale and Anchor brands , warned this week there could be shortages on shelves.

Arla said this was because  farmers have complained it is no longer profitable to milk cows and volumes are falling rapidly. 

As a result, Arla bosses have said that cheap milk is no longer sustainable.

One supermarket source said that the industry was facing “screaming levels of inflation but retailers aren’t passing it all on, everyone is having to take some of the pain.”

A Sainsbury’s spokesman said: “We are working closely with our farmers to help them navigate the significant cost pressures we understand they are facing, while continuing to invest in keeping prices as low and competitive for our customers as we can”.

Sainsbury’s said that milk prices were also impacted by higher costs of packaging and transport, which has risen by around a third due to fuel prices.

An Arla spokesman said: “The cost of living squeeze is putting real pressure on households at the same time, the cost of producing milk has increased to an all-time high and our farmers are struggling to cover their costs, which is resulting in less milk being produced.

“The cost increases that we are seeing on farm are so significant we do have to pass some of these on to ensure our farmers can continue the supply of products into the shops.”

Farmers have said that it now costs around 44p to produce a litre of milk compared with 28p a year ago.

The average household’s grocery bill is expected to rise by £380 a year, according to data by Kantar.