Shoppers being overcharged by almost £2 per kilo on cheese Cheddar up 1.8 per cent in past year despite steep falls in wholesale costs Industry insiders say it's a sign supermarkets are 'guarding their margins' Even steeper retail price increases have been seen on territorial cheese But fans of blue cheese are hardest hit with a 6.1 per cent price increase Britain's cheese lovers are paying well over the odds for their favourite food after supermarkets failed to pass on cuts to wholesale prices. A report yesterday showed that the retail price of many popular cheeses has actually increased despite a slump in the wholesale dairy market. In the case of cheddar the average retail price of a kilo of cheese has risen 1.8 per cent over the past 12 months to £8.99. But if prices had moved in line with wholesale costs - down 18.6 per cent year on year - a kilo would cost only £7.19, £1.80 less than the current price. A real luxury: The average price of a kilo of cheddar cheese has risen 1.8 per cent over the past 12 months to £8.99. But if prices had followed the 18.6 per cent fall in wholesale costs a kilo would cost only £7.19 Trade magazine The Grocer says that retail price hikes have been even steeper in own-label cheddar, up 3 per cent to £7.45, while promotional activity has kept a lid on the price of the major brands. Across three of Britain's largest cheddar brands - Cathedral City, Seriously Strong and Pilgrims Choice - the average price has risen 0.3 per cent year on year to £10.81. 94 shares Data from commodities analyst Mintec showed turmoil in the global dairy markets - made worse by the Russian import ban - has contributed to wholesale price drops such as European skimmed milk powder falling 39 per cent year on year in the 12 months to the end of September. At the same time, dairy farmer protests are targeting processors and retailers over a spate of cuts to the price they are paid for their milk. Yet The Grocer says that a snapshot of the retail price of lines sold in the big four supermarkets on 4 November 2014, compared with the same products 12 months ago, shows many have actually increased. 'Industry insiders say this suggests retailers have been guarding their margins on Cheddar despite the price war raging in the aisles - though they expect retail prices to come down should wholesale prices continue to fall,' The Grocer said. Dairy farmer Rob Harrison, chairman of the National Farmers Union dairy board, told The Telegraph: 'Retailers make an awful lot of money on cheese and it seems they are trying to increase their margins further.' Hardest hit: Fans of blue cheese are paying on average 6.1 per cent more than a year ago, at £11.87 a kilo. Even steeper retail price increases have been seen on territorial cheese - again driven by increases in own-label lines. Across the category, prices have risen 4.5 per cent to £8.54 a kilo with branded products up 4.1 per cent to £8.62. Fans of blue cheese have been hardest hit and are paying on average 6.1 per cent more than a year ago, at £11.87 a kilo. The report says there is better news for bargain-hunting shoppers in the Continental cheese category - if they stick to own-label lines. On average, own-label Continental cheese has fallen 1.6 per cent to £10.93 while branded lines have risen 2.7 per cent to £9.78. Processed cheese, meanwhile, has risen 3.2 per cent.