Milk war rages in Jyväskylä stores - there IS such a thing as a free litre of milk

print this

As a result of the fierce competition between hypermarkets in Jyväskylä, the local stores started to attract customers with milk as the loss leader of choice. Hence, the current price of milk in some stores is as low as one cent a litre.
      In practice, the K-Citymarket stores in Jyväskylä were offering Estonian Euroshopper milk completely free, gratis, and for nothing on Wednesday and Thursday, as the price for one or two litres of milk would be rounded down to zero. Finland does not use the one or two cent coins, but prices are rounded up or down to the nearest EUR 0.05.
      Finnish milk cost four cents a litre in the supermarkets of Citymarket, Prisma, and Miniman in Jyväskylä, while Euromarket priced its milk at 45 cents a litre.
     
The milk war began last week when Citymarket brought the price down to 38 cents a litre. The competitors answered the challenge by slashing their own prices.
      The price competition is a result of a fierce turf-war over customers that started in April when a new K-Citymarket store was opened in the Seppälä region in Jyväskylä. This region used to be Prisma’s territory.
      Even Managing Director Kari Kivikoski of the K-Citymarket chain was surprised: "One cent a litre is quite a record in this country". According to him, the stores of the chain are free to set their prices independently.
      Director Kyösti Mikkonen of the competing Prisma chain refers to a temporary market disturbance: "A new major store has entered the market trying to reach its own sales volume level. As a result, even hardball tricks have to be used in order to draw customers into the store."
     
Elsewhere, the price of milk will not be reduced to the same level, as the current battle over the market shares is local, assume both Kivikoski and Mikkonen.
      However, neither of the two directors can say for how long discount milk will be on sale in Jyväskylä. Eventually, it is a question of money, and neither is willing to give up the battle first.
     
The domestic dairy producer Valio is carefully following the prices set on milk. Annika Hurme of Valio commented that it is good to see that milk is regarded as such an important product.
      On the other hand, however, she charges that this kind of dumping is not worthy of the product. After all, it takes a lot of work to produce one litre of milk.
     
Even though it is only a local phenomenon, the milk-war marks a change in the loss-leader rankings: all summer long the Finnish supermarkets vied for customers with increasingly attractive prices on six-packs and 12-packs (known affectionately as "dachshunds") of medium-strength beer.
      After the government’s tax-cuts on alcohol in March, which did not in fact greatly affect the price of beer, retailers slashed their prices, with the result that prices for twelve 0.33 litre bottles approached those of a six-pack before battle commenced.


Previously in HS International Edition:
  Milk war spreads to Helsinki region (30.1.2003)

Helsingin Sanomat