European organic dairy market ‘must balance supply and demand’

EUROPE – A report published on Tuesday claims that the European organic dairy market must balance supply and demand if it is to continue to grow.

The survey, published by market analyst Organic Monitor, claims that 50% of organic milk produced in Denmark and the UK in 2001 had to be retailed as ordinary milk due to low demand, despite a supply shortage in Southern Europe.

According to the report, sales of European organic dairy products rocketed 26.2% in 2001 to 1.2 billion euro. It states that milk accounted for 42.5% of European organic dairy sales in 2001 but adds that this only represents 3.1% of total milk sales.

The report states that the fastest growth was in Italy and Germany and that consumer demand for organic products was boosted by fears of contracting BSE from non-organic dairy products.

The report predicts that by 2007 Germany will be Europe’s largest organic dairy market, accounting for a third of sales. It claims that Britain and France will be the second and third largest European markets by 2007.

According to the report, 63% of organic dairy products were sold in supermarkets. This figure was 90% in Scandinavia, where organic dairy products enjoy strong sales. Danish consumers spend eight times more on organic dairy products than their German counterparts.

Although organic milk accounts for 33% of all milk sales in Denmark, the report predicts that market maturity here means that any future growth will be slow.