Butter prices plummet in Poland, but dairy producers warn of market distortion

Polish supermarkets are drawing customers with deep discounts on butter, with offers like Lidl and Biedronka selling butter for as low as 1.99 Polish zloty per pack, often requiring the purchase of multiple units of their own brand. These aggressive pricing strategies have prompted concerns from dairy cooperatives.

The Office of Competition and Consumer Protection (UOKiK) has investigated these promotions after receiving official complaints. The National Union of Consumer Cooperatives "Społem" argued that prices as low as 0.99-1.99 zloty per 200g pack could indicate sales below cost, disrupting fair competition. Another anonymous complainant raised similar issues.

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UOKiK has looked into the situation on the butter market, including promotions used by retail chains. Price reductions are primarily part of intense price competition between chains. At this stage, there are also no grounds to suspect a price-fixing cartel. Selling a product at a very low price, even below its average purchase price, does not in itself constitute a violation of the law – promotions are usually limited in time, quantity, or dependent on meeting additional conditions.

However, the UOKiK stated that even sales below the average purchase price do not necessarily distort competition. The office noted that these promotions are typically time-limited, quantity-restricted, or conditional. "At this stage, there are no grounds to suspect a price-fixing cartel," the UOKiK responded, adding that it does not regulate prices but monitors the market for anti-competitive practices or abuses of buyer power.

Dairy producers, however, express concern. Małgorzata Cebelińska, vice-president of SM Mlekpol, acknowledged that promotions are normal but stressed the difference between standard sales and pricing below actual production costs. She stated that prices like a few dozen groszy for butter or 1.20 zloty for milk do not reflect manufacturing expenses and could mislead consumers, disrupting market balance. Mlekpol is a significant player, controlling 70% of the Polish milk market.

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From our perspective, a pack of butter for a few dozen groszy or a liter of milk for 1.20 zloty does not reflect the real costs of production, misleads the consumer, and disrupts market balance.