Czech dairy industry protests ultra-low supermarket milk prices

Retailers in the Czech Republic are selling milk for as low as 5.90 CZK per liter, a price point lower than many bottled water products. This has sparked significant backlash from farmers and dairy industry representatives, who argue that such pricing is economically unsustainable and devalues the product.

Industry experts suggest these prices are likely a ‘loss leader’ marketing strategy, where supermarkets absorb losses on milk to encourage customers to purchase other, higher-margin goods. While the average production cost for milk is significantly higher than the retail price, large retail chains have the marketing budgets to sustain such tactics, whereas individual dairies and small farmers cannot.

The price drop is partly driven by a milk surplus across Europe, which has caused wholesale prices to fall. However, Czech industry leaders, including Jiří Kopáček of the Czech-Moravian Dairy Association, warn that this creates a ‘total deformation of prices.’ The Czech Meat Processors Association has called on the government to classify selling below cost as an unfair trade practice.

In response, Agriculture Minister Martin Šebestyán noted that the situation may lead to market concentration among a few powerful entities. On a broader scale, the European Commission has acknowledged the issue, with Commissioner for Agriculture Christophe Hansen promising a new directive regarding unfair trade practices later this year.