Cheap imported butter is undercutting local brands

Lew Skannen

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https://www.businessinsider.co.za/bruce-whitfield-ukrainian-butter-2019-4

South Africa has been a net importer of butter for years. In 2018, 85% of those imports came from as far afield as New Zealand, Denmark, Ireland, and the Ukraine.

And it’s cheaper to import than it is to make it locally. Imports in 2018 ranged from around R68 per kilogram to about R100 per kilogram. And with only a R5 per kilogram import duty, the imports are undercutting local suppliers.

All Woolworths-branded butter carries the "Product of South Africa" label, but Shoprite-owned Checkers has a far wider range from all four corners of the globe. There you will find "President of France", which is priced at a premium to local butter, while American and Ukranian butter significantly undercuts the local market.

On a recent visit to Checkers Business Insider found Kings Gold (from the Ukraine) retailing at under R50 for a 500g block, while Crystal Valley (from the USA) comes in under R60.

Local brands like Ladismith retail around R65 a block and Clover’s main offerings Springbok and Mooi River go for over R70 for half a kilo. Processed products made by the likes of Lurpak and Kerrygold from Ireland sell at premium prices in smaller formats.

Shoprite said in written replies to questions that it increasingly was receiving less butter than it needed from local suppliers and was forced to source product internationally to meet demand.
 

Lew Skannen

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Shoprite said in written replies to questions that it increasingly was receiving less butter than it needed from local suppliers and was forced to source product internationally to meet demand.
This has been going on for a number of years now. Many companies complaining that a number of products are becoming more and more limited in SA. Our farmers have passed the point where they can no longer produce sufficient produce for the whole country. Not only butter, but many others too. We now have to rely on imports to survive in SA.
 

Zoomzoom

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Old news, price of LOCAL butter has come down significantly recently. And the imports were ONLY comparable with local when local prices went through the roof due to the shortage last year. Otherwise they are significantly more.
 

Zoomzoom

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Crystal Valley is labelled "Product of South Africa" BTW. Checkers own brand.
 

MightyQuin

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Crystal Valley is labelled "Product of South Africa" BTW. Checkers own brand.
It's more complicated than that, althouigh info is sketchy.

Their long life milk is imported from Poland under the Crystal Valley brand.

I think Shoprite imports using Monteagel and the butter, cheese, milk etc. in bulk and then package it under their Crystal Valley brand locally in SA.
 

MightyQuin

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that explains it, the hardest most plastic like cheese known to mankind ... is American

their butter's ok to cook with though I guess
Crystal Valley "cheese" is literally inedible...I think it is 1% removed from the processed cheese category.
 

Yirhu

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I don't get it how is it that imported butter is cheaper here and locally produced is expensive? Unless if it's made in china of course but these butter products seem to be from non-Asian countries.
 

Dairyfarmer

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Amazing how much butter cost. We have lost around R1.50 per litre for milk in the last 12 months. Currently we get around R3.50 per litre. Most raw milk is around 3.8 to 4% fat. this is what is removed to make low fat products and semi-skimmed (2%) and skimmed milk (1%). Even "full" cream milk is skimmed of fat. What do you pay for milk in the supermarket? Can you get anything less than R10 litre?

Butter is basically very well whipped cream with salt.
 

Lew Skannen

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Amazing how much butter cost. We have lost around R1.50 per litre for milk in the last 12 months. Currently we get around R3.50 per litre. Most raw milk is around 3.8 to 4% fat. this is what is removed to make low fat products and semi-skimmed (2%) and skimmed milk (1%). Even "full" cream milk is skimmed of fat. What do you pay for milk in the supermarket? Can you get anything less than R10 litre?

Butter is basically very well whipped cream with salt.
Considering your nick, I will take your word on your post.
 

Dairyfarmer

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I don't get it how is it that imported butter is cheaper here and locally produced is expensive? Unless if it's made in china of course but these butter products seem to be from non-Asian countries.
Fortunately China is a very low producer of milk. Has to do with the majority of Chinese being lactose intolerant. Something like 90% of adults have some form of lactose intolerance.

South America and NZ produce a lot of powdered milk as their local consumption is far below supply. The majority of cheese and butter in SA is produced using powdered milk.
 

Dairyfarmer

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greedy corporates like Clover that take the biggest slice.
Clover loads it price to make the product seem more superior. Like Apple with the iPhone. But because they can load their price and people are will to pay, they do it.

Many unbranded milk products come from the likes of Clover, Dannon and Parmalat. Same factory, same process, different packaging.
 

Napalm2880

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Amazing how much butter cost. We have lost around R1.50 per litre for milk in the last 12 months. Currently we get around R3.50 per litre. Most raw milk is around 3.8 to 4% fat. this is what is removed to make low fat products and semi-skimmed (2%) and skimmed milk (1%). Even "full" cream milk is skimmed of fat. What do you pay for milk in the supermarket? Can you get anything less than R10 litre?

Butter is basically very well whipped cream with salt.
My father-in-law runs a small dairy and It's unbelievable how the prices can swing so wildly. Surely the supply and demand can't be that volatile?
 

Pox

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Clover loads it price to make the product seem more superior. Like Apple with the iPhone. But because they can load their price and people are will to pay, they do it.

Many unbranded milk products come from the likes of Clover, Dannon and Parmalat. Same factory, same process, different packaging.
Danone*

But yes, a lot of products are identical, and are merely put into different packaging.
 
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