Butter prices steady after “hysteria” fades

A spike in the price of butter in recent months led to panic-buying and even saw the PM involved. But prices shouldn’t rise again before Christmas.

Photo: Štěpánka Budková

The price of butter has been a pressing issue in the Czech Republic in recent months. Words like “madness”, “panic” and “hysteria” appeared in headlines and there were reports of hoarding, cross-border butter runs and anxious shoppers grabbing relatively cheap butter straight out of supermarket boxes.

In late September even Prime Minister Bohuslav Sobotka got involved, calling on the Ministry of Finance to look into whether unfair practices were behind the spike in prices.

While prices are no longer at their late-summer peak, Ministry of Finance officials are still working on that analysis, which should be released soon, once it has been presented to the government.

However, the president of the Czech Confederation of Commerce and Tourism, Marta Nováková, said on Czech Television on Sunday that the document was sure to show the real situation on the butter market.

Ms. Nováková said that the media coverage and political interventions had contributed to a recent dip in prices – and retailers had ended up taking the hit.

“Chain stores’ margins on butter are genuinely at a minimum in view of retailers’ ability to make a living. Given what the political situation was like, retailers won’t now put a large margin on that product, even though there is high demand on the market. The political, and media, situation led retailers to respond as they did.”

Indeed, retailers’ margins on butter have now fallen to as low as 8 percent, Ms. Nováková said.

The president of the Federation of the Food & Drink Industries of the Czech Republic is Miroslav Toman. He told Czech Television that Czech consumers need not fear another upswing in prices in the near future.

Miroslav Toman, photo: Šárka Ševčíková

“The price of butter is falling on European markets. So is the price of cream. Therefore, I don’t expect prices to keep growing here. Butter should remain more or less at current prices, although different retailers will charge different amounts. I dare say that the price will remain around the level it is now until Christmas.”

Mr. Toman’s words were echoed by Josef Stehlík of the Association of Private Farmers.

“The situation on the market has calmed down. And it looks like leading to a situation where prices may stagnate but they definitely won’t grow.”

For his part, Mr. Stehlík attributed the fall in butter prices to a decline in demand as consumers have switched to margarine, a cheaper alternative.