The growing demand has put a strain on the industry. Due to a significant fall in prices mainly brought on by a 2014 Russian embargo of European food products, the cost of a bottle of milk in many parts of the continent was lower than a similar bottle of water. The industry responded by producing less and dipping into their stockpiles, causing a 98 percent decline in inventories. Now, as prices have begun to rise again, there’s not enough butter to go around. Things are so bad that the chief executive of one large U.K. dairy recently warned that there may not be enough milk and cream for everyone at Christmas.
All of this is having a big impact on bakeries, restaurants and other small businesses in the food industry across the continent. With butter prices rising more than 20 percent over this time last year and supplies dwindling, many have been forced to increase their own prices to maintain margins … or discontinue products altogether.
One owner of a small patisserie in France told CNBC that although she hadn’t increased her prices yet, she may be forced to consider doing so if the market doesn’t stabilize by the fall.
“In France, if bakeries wish to make croissants, pain au chocolat or patisseries then consumers will have to pay more, “ a representative of the French bakers’ association told CNBC. “We hope they understand our position because making quality products means charging a higher price at this time.
The group warned that butter shortages “appear to be a real threat by the end of the year.”