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Soaring butter demand sees supply shortage hit Finland, Sweden and Russia

By Ben Bouckley , 25-Oct-2011

Shops in Finland, Sweden and Russian will suffer some ‘scarcity’ of butter supplies for the rest of this year, as leading Finnish dairy processor Valio struggles to meet soaring demand.

Retailers in Finland and Sweden have already reported butter supply shortages this autumn, due to a boom in demand for butter and a shortage of raw milk.

A Valio spokeswoman confirmed the accuracy of quotes given by vice president of food production, Reima Luomala to the Finnish press last week, and herself told DairyReporter.com: “There will be some scarcity of butter in all those main markets.”

Valio has been forced to reduce supply both in Finland and Sweden during the autumn due to insufficient milk supplies, Lumala told media outlet YLE.

“Milk production can’t be expanded immediately. For the rest of this year we’ll have to cut back on the amount of butter available in all our main markets,” he said.

Butter consumption boom

Luomala said that Valio – which is the largest dairy operator in Finland – was unable to expand production immediately, with the company striving to cater for butter consumption up 20 per cent in country this year compared with 2010.

“For the rest of the year, we’ll have to cut back on the amount of butter available in all our main markets, which are Finland, Sweden and Russia,” he said.

An Arla Ingman spokeswoman told DairyReporter.com that increased demand for butter (in Finland at least) was due to consumers in the country using more natural products, as well as the trend towards low GI (glycemic index) diets.

“Due to the trend towards real and natural food consumers are buying more butter, as well as products with less additives," she said.

She added: “Also, dairy products with higher fat are selling more, and therefore the milk fat is used in other products like yogurt and cheese.”

Prices set to rise

Despite Valio’s supply issue – which has hit availability of all butter brands in Finland and Sweden – the spokeswoman insisted that Arla Ingman was producing sufficient product volumes to supply its contract customers.

“We have also nearly doubled the production amounts in butter to meet customer needs,”she added.

Asked how Valio planned to tackle its supply problem, the firm’s spokeswoman said: “Valio will be as efficient as possible in planning the production, so that all the main market needs could be filled fairly.”

Valio added that it expected Finnish butter prices to rise, not just due to increased demand but also the fact that the nation had the EU’s lowest-price butter, while milk prices were amongst the most expensive in the bloc.

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