The CEO of Arla has predicted that the price of butter and cream in Europe will rise significantly by the end of the year due to milk shortages.
Speaking on BBC’s Today programme this morning, Peder Tuborgh said that there is now not enough milk available to make dairy goods because producers ‘put the brakes on’ last year.
Cuts in production came as a result of Russian sanctions as well the removal of quotas on production in Europe, which together were ‘too much for the market’.
A spokesperson for industry body Dairy UK told the BBC there had already been ‘significant increases’ in wholesale prices for butter and cream.
It added: “To what degree price increases are transmitted to consumers is a matter for retailers.”
Arla, which owns Lurpak and Anchor, raised its milk prices last August following 18 months of falling prices. It is the world’s fourth largest dairy company and the biggest supplier of butter and spreads in the UK.
Peder Tuborgh continued: “Particularly in the area of butter and cream, you might see that… demand slows down a bit because at Christmas time there simply will not be enough butter and cream around.
“The first sign you’ll see is that the prices of butter will rise very sharply and you’ve started to see that.”
The National Union of Farmers in the UK said Tuborgh’s prediction was ‘scaremongering’.
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