Bakers feel the pinch as butter hits record highs
European bakeries and food producers are starting to look at substituting margarine for butter as spot prices hit record highs of €6,000 a tonne.
French bakeries have been particularly vocal about butter shortages impacting on their famed croissants and pain au chocolat.
Ornua dairy trading expert Joe Collins says customers are now buying "hand to mouth" as the spot butter prices have surged 160pc in the last year.
"In the food ingredient sector we are hearing customers talking about reformulation and looking at veg fat instead of butter fat," said Mr Collins.
"We are hearing in the food service sector of firms replacing margarine with butter and some food service outlets are not putting butter out on the table."
With the Kerrygold butter brand achieving retail sales of €900m, Mr Collins said all brand owners' margins were being impacted and they were concerned about long-term brand damage if consumers trade down to lower quality own label brands.
Butter sales were back around 11pc during May at retail level in Germany which is one of the key markets.
Exports from the EU to countries outside the union have slumped 19pc up to the end of April, with exports to the Middle East and North Africa down 40pc as lower oil prices also impact.