The chair of the fresh milk producers Jim Mulhall has called the sale of milk at a discounted price from Homesavers as 'cynical'.

The recently opened store located in Mullingar is selling two litres of low fat milk from Strathroy Dairy for €1.29, a price Mulhall says is damaging to the industry.

“Homesavers are a new player in the market and they seem to be trying to attract shoppers from other discounters by cutting the price of milk.”

“It’s devaluing food and devaluing the product we produce. It’s a cynical move and could have a potentially damaging long-term impact.”

'Contagion effect'

Mulhall expressed fears of a “contagion effect” where other discounters could drop the price of milk to match Homesavers’ price.

He cited the previous successful work of organisations earlier this year to get Aldi and Iceland to increase their milk price.

Many dairy farmers have experienced a hike in input costs after tough spring and summer conditions, and are likely to be angered by the idea of retailer cuts to profit margins.

Homesavers and their parent company Centz – which is mainly located in Dublin, declined to comment on the issue of milk discounting, despite repeated requests for a statement.