CPC inquiry exposes profit gap in Cyprus dairy sector

A sector inquiry by the Commission for the Protection of Competition (CPC), completed on September 25, 2026, has revealed a significant disparity between the profitability of livestock farmers and major dairy processors in Cyprus. The report, which analyzed the market between July 22, 2022, and July 25, 2023, identifies the cheese-making industry as an oligopoly, with seven major companies controlling nearly 69% of the sheep and goat milk market and 84% of halloumi exports.

While large cheesemakers report net profit margins between 4% and 14%, individual sheep and goat farmers face operational losses, as evidenced by a cost analysis showing that producing goat milk results in a loss of 0.33 euros per liter and sheep milk a loss of 0.38 euros per liter. This financial strain is exacerbated by the sector's reliance on imported feed and the fact that 80% of producers operate independently, lacking the leverage provided by organized producer groups. In contrast, the cow milk sector exhibits different dynamics with a more consolidated structure.

The findings underscore the decisive influence of PDO halloumi production on pricing mechanisms. The CPC's report highlights that the primary production stage remains fragmented, leaving individual farmers vulnerable to the consolidated buying power of a few major dairy processors, such as Charalambides Christis, Dodoni Cyprus, and Petrou Bros, among others.