Less milk for your money post-Brexit

Wednesday 29 March 2017

Islanders are going to have to spend more on every pint of milk due to a post-Brexit drop in the pound’s value.

On the day the UK triggers its formal divorce proceedings from the EU, Jersey Dairy has announced an increase of 4p per litre in its wholesale price from Monday 15th May. They say the rise is essential to protect the future of the local dairy industry.

The increase follows the British pound’s poor performance against the Euro, which Jersey Dairy say has sparked a hike in their operating costs.

Butter and ice cream prices will also be pushed up by between 4% and 8%, effective from the same date.

Mark Cox, Chief Operating Officer of the Coop, told Express that the hike would "unfortunately" result in higher retail prices for customers of the supermarket chain.

"Given the size of the increase, it's not something that we would be able to absorb. We recognise the reasons why the Dairy are doing it. This increase in costs coming through the supply chain as a result of the devaluation of the pound in particular so we understand it.

"When you look at this increase in comparison to the increase that is proposed in Guernsey, it's half. We benefit from the Dairy running a very efficient operation. Certainly the scale of their export market now has probably protected us a little bit."

The Dairy is defending the increase, saying the wholesale price of milk has only increased four times over a 14-year period, representing only a third of the increase in RPI.

Eamon Fenlon, Managing Director of Jersey Dairy, said that the company had been fighting a rise for as long as possible, but, after four years without an increase, it had finally given in to secure the dairy's future.

“We have taken the impact of the movement in exchange rates for the last eight months in the hope that there would be signs of a recovery, but this has not been the case and we are facing increasing costs in packaging, ingredients, operational supplies and other services supplied to Jersey Dairy, with some price increases approaching 20%.

“The Dairy industry is an important part of Jersey’s heritage, so whilst we are reluctant to increase our prices, it has become unavoidable if we are to address some of the increased costs we are facing in order to sustain the commercial future of Jersey Dairy and the dairy industry.”

Retailers were informed of the change this morning.