An escalating price war between the UK's largest supermarkets means that the price of milk is now cheaper than bottled water, CNBC reported on Wednesday.

The financial news website said Britain's big four grocers - Tesco, Morrisons, Sainsbury's and Walmart's Asda - have all slashed grocery prices over recent days in a bid to maintain market share in the face of increasing competition from German discount chains Aldi and Lidl.

The result is that fresh, own-label milk is now cheaper than some brands of bottled water on a pence-per-litre basis.

Looking at volume prices collated by Brandview.com, the price per litre of milk in supermarkets has dipped to 43 pence (87 cents), compared to 44 pence for water sold in larger packs and multipacks, CNBC said.

While UK consumers stand to gain from milk price cuts, British dairy farmers said their income was being forced down by supermarkets and many are leaving the industry as a result, CNBC reported.

The UK's National Farmers Union (NFU) said that 60 dairy farmers gave up milk production in December alone, CNBC said.