Supermarkets have slashed the cost of milk this week in a competition to help keep costs low even as the cost of food increases.
Tesco started the price war on Wednesday, April 12 when the retailer cut the cost of its milk for the first time in three years. The price of a four pint bottle dropped from £1.65 to £1.55 whilst two pints went from £1.30 to £1.25 and one pint was reduced from 95p to 90p.
This was soon followed by Sainsbury's the following day when the supermarket slashed its four pint bottle to just £1.55 for four pints, similarly cutting two pints to £1.25 and a pint to 90p.
Now, Lidl, Aldi and Asda have followed suit by making identical price cuts from today across own-branded bottles of milk to match their competitors.
The Mirror reports that the price cuts will not affect how much each supermarket pays their dairy farmers as they look for ways to continue keeping costs low for customers.
Some analysts have suggested this is a possible sign that grocery prices could finally start to come down.
Tesco confirmed that the reason for its decision to cut costs across milk was because the price of buying had fallen, so they wanted to pass that reduction onto customers.
The reductions come as households continue to battle rising costs at the supermarkets during the cost of living crisis, with food prices increasing by 18.2 percent on a yearly basis.
Laith Khalaf, head of investment analysis at AJ Bell in Bristol, told the BBC yesterday the price cuts are "some light at the end of the inflationary tunnel for consumers".
"It also suggests that the UK's fiercely competitive supermarket sector isn't simply going to cash in on profits as wholesale costs fall, because there's always a competitor waiting in the wings to do some undercutting," he added.
Richard Hunter, head of markets at Interactive Investor said: "'The supermarket price war has been underway for some considerable time, and in the current environment basement prices have become extremely important to the cost-pressured consumer.
"The reduction in milk prices will be a welcome development, but with food inflation overall still around 17%, upward pressure on prices are very much intact.
Jason Tarry, Chief Executive at Tesco said: "We know that customers are still having to budget carefully, so we’re pleased to be able to reduce prices where we can, and also give them a little extra help by locking the prices of more than a thousand everyday products. Milk is a key everyday staple for so many families. We’ve seen some cost price deflation for milk across the market in recent times, and we want to take this opportunity to pass that reduction on to customers.
"This will not affect the price we pay our farmers. Our Tesco Sustainable Dairy Group was set up to ensure that farmers across the UK get a fair, independently-set price for the milk they produce for us. Our model gives farmers security when the market price for milk falls below the cost of production and reflects our long-standing commitment to our farmers."
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