Scottish shortbread makers, confectioners and bakeries are suffering because the price of wholesale butter has doubled since the start of the year — with wholesale prices now at a record high.
The Scottish Government said the industry could benefit from support to combat butter shortages and rising prices in the butter market.
The Scottish Agricultural Organisation Society (SAOS) will undertake an urgent feasibility study to explore opportunities for collective buying and storage, to increase market competitiveness and boost sales.
The study will also look at the potential to forecast future market activity to mitigate the effects of volatility on the sector.
The work is being delivered through the £1 million Market Driven Supply Chain (MDSC) project, announced in March.
Speaking at the RBS Food and Drink conference, Rural Economy Fergus Ewing said: “Our food and drink industry is a significant and growing part of our economy and we want to support our manufacturers to compete in global markets – particularly during times of economic pressure.
“The price of wholesale butter has doubled since the start of the year, with wholesale prices at a record high.
“This is a concern for many of our smaller food and drink manufacturers who use butter as a primary ingredient, such as our shortbread and confectionary producers and bakeries, and who are finding trading tough.
“We have listened the concerns of our manufacturers and this urgent feasibility study will explore opportunities to exploit buying and efficiency savings made available through collaboration, boosting productivity and competitiveness within domestic and global markets.
“We expect to see the outcome of the study within the next month or so and we look forward to supporting the industry if whatever way we can.”