'Butter is expensive right now. There's no getting away from that' - Finance Minister Nicola Willis
Photo:
Margaret Jaszowska for Unsplash
The Finance Minister does not believe New Zealanders are getting a "raw deal" on butter, but has accepted there is no getting away from how expensive it is right now.
Nicola Willis met with Fonterra's chief executive Miles Hurrell
at Parliament on Tuesday evening.
While the two meet regularly, there was increased interest in the meeting due to the current price of butter. Willis had earlier said it was something she would discuss with Hurrell.
Characterising the meeting as "constructive and engaging," Willis said Hurrell was candid about the way butter was priced in New Zealand.
Her summarisation of her meeting with Fonterra largely zeroed in on her drive to increase supermarket competition.
The large proportion of what people pay for butter is dictated by global demand, which is something the government could not control.
"Were that price to come down, you would expect that to be reflected in the prices that New Zealand shoppers pay," Willis said.
Hurrell had told her that butter had once been the hardest product for Fonterra to sell globally, but the increasing demand was due to reporting on its health benefits.
"It was once viewed as a bogeyman," she said.
The meeting had reinforced Willis' interest in increasing supermarket competition to put downward pressure on the price of butter.
"All roads lead back to supermarket competition. I continue to believe that is the most powerful lever that the government has on this issue. We will never be able to control global dairy prices. What we can influence is the amount of competition in New Zealand's grocery sector and we have a lot of work underway to address that."
Finance Minister Nicola Willis does not believe New Zealanders are getting a "raw deal" on butter.
Photo:
RNZ / Mark Papalii
Fonterra had also observed the supermarket competition.
"Miles specifically conveyed that Fonterra operates in a number of markets around the world, most of which have a more competitive supermarket sector, and that it does feel different in New Zealand."
She would leave it to supermarkets and Fonterra to argue who was charging what margin.
"The sense that I got from my engagement with Miles is that it's a constant battle between them. Each party are probably going to point fingers at the other."
Hurrell would not answer questions when RNZ approached him outside Parliament on Tuesday night, but a Fonterra spokesperson said the meeting was "constructive".
Willis said she had encouraged Hurrell to front, in particular to explain what proportion of the margins go to Fonterra and what goes to supermarkets.
Acknowledging that Fonterra's job was to get the best possible price for its shareholders, Willis also accepted New Zealanders saw the downsides of that when they were shopping.
"I've been satisfied that I don't think consumers are getting a raw deal. I think that there is good work going on to ensure that there is pressure and competition from Fonterra to try and keep its prices low. But I get it. Butter is expensive right now. There's no getting away from that."
Sign up for Ngā Pitopito Kōrero
,
a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


NZ Herald
4 hours ago
- NZ Herald
Nicola Willis criticised for cost of living ‘sermon' during post-Cabinet press conference
'Spending more, taxing and borrowing more as Labour and other parties advocate for, didn't work in the past and it won't work in the future,' Luxon said. Finance Minister Nicola Willis during the post-Cabinet Press conference at Parliament. Photo / Mark Mitchell 'The most important thing we can do to make you better off is to double down on our economic plan,' he said. Hipkins called Willis' and Luxon's address a 'sermon' that showed the pair was out of touch with the daily reality of New Zealanders. Although the party said they were going to get 'New Zealand back on track' as per their election campaign slogan, Hipkins claimed 'across the board, New Zealanders can see the country is going backwards.' 'Yet Christopher Luxon and Nicola Willis just say – 'oh, that's all part of the plan, we've got this' – they haven't got it. 'Things are getting worse for the vast majority of New Zealanders and no amount of spin from them is going to change the reality that things are getting worse for New Zealanders under their leadership. 'I think we should start calling them Fisher and Paykel because they've got more spin than a front load washing machine.' Tax relief was a major part of National's 2023 election campaign amid flaring inflation and a cost of living crisis. The party campaigned on a series of policies aimed at helping the 'squeezed middle', including adjusting tax rates, increasing tax credits and FamilyBoost. These policies came into effect in July last year. Willis said today the average household is $1,560 better off after the Government's tax relief package. 'We have also introduced FamilyBoost, which with the latest expansion gives families up to 40 per cent off their childcare costs. 'We have removed the Auckland fuel tax, introduced 12-month prescriptions, increased the rates rebate for 66,000 seniors and increased Working for Families payments.' Finance Minister Nicola Willis and Prime Minister Christopher Luxon arriving for the post-Cabinet Press conference. Photo / Mark Mitchell Luxon stressed that a year and half into the term, he and his party were still fixated on improving the economy and the cost of living. Things were still tough for many families but the economy was 'expected to grow on average 2.7% per year creating 240,000 jobs over the next four years. 'In the short term we are pulling every lever we can to help Kiwi families with the cost of living.' The Government also announced the scrapping of surcharges at the till, such as when a customer uses PayWave or their mobile phone to make a payment. 'New Zealanders are paying up to $150 million in surcharges every year. That's money that could be saved or spent elsewhere.' Luxon also said the changes the Government were making to construction would help reduce costs for businesses and New Zealanders. Earlier in the day, Workplace Relations and Safety Minister Brooke van Velden announced she would review safety rules for scaffolding, saying she had received many complaints from the construction industry that current regulations were too complex and expensive. Van Velden was light on the details of what specifically would be reviewed, but said officials would consult on proposed new rules that would give people a selection of safety options depending on how dangerous the job was. 'If it's not very risky, they will not need to use expensive scaffolding. 'For example, they will be considering whether a ladder could be used instead of scaffolding for a simple roof gutter repair or minor electrical maintenance when working at height.'

RNZ News
5 hours ago
- RNZ News
Ban on card payment surcharges: Cafe owner says they'll have to pass on cost
The government plans to ban surcharges on card payments for in-person payments. Photo: 123rf Prices may need to rise at restaurants and cafes due to a ban on credit card surcharges, the sector is warning. The government plans to ban surcharges on card payments for in-person payments. Legislation is expected to be introduced to Parliament by the end of the year, with the ban to kick into effect no later than May 2026. Richard Corney, founder of Flight Coffee and The Hangar cafe, said he would have to pass the cost on to consumers somehow. "Our cafe, The Hangar, paid $17,000 in merchant fees in 2023 for the privilege of using PayWave and other associated services," Corney said. "Yes, it speeds up service and there's value using it, but the solution isn't banning vendors from on charging this expense. What next? They ban cafes from charging a surcharge for opening on a public holiday? Better yet, and while they're putting restrictions on the banks, why not ban the banks from charging for this service outright and save small businesses real money by not having to fund this expense." He said cafes would operate on profit to revenue ratios of less than five percent. "Banks do not - and they're also institutionally paramount functions of our society," Corney said. He said $17,000 was a significant portion of after-tax profit "I absolutely have to on-charge any associated expense with regard to this." The policy seemed out of touch, he said. Restaurant Association chief executive Marisa Bidois agreed it would be tough on hospitality businesses operating on tight margins. "These surcharges are genuine costs that businesses must pay. Without surcharges, businesses will need to absorb these fees, further impacting already small margins." She said the announcement had come as a surprise. "We've actively engaged with the Government to outline the financial pressures faced by hospitality businesses due to bank-imposed fees," Bidois said. "While we welcome consumer-focused changes, we are concerned about the lack of consultation on this particular announcement." She said businesses would probably need to adjust their pries. "Removing the ability to surcharge could mean businesses factoring these costs into their overall pricing, potentially leading to increased costs for diners." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.


Otago Daily Times
5 hours ago
- Otago Daily Times
NZ 'back on course', govt says
By Russell Palmer of RNZ The government has launched a defence of its record on tackling the cost of living. Finance Minister Nicola Willis joined Prime Minister Christopher Luxon at the Beehive Theatrette for the weekly post-Cabinet briefing. She spent much of the previous week facing questions about her meeting with Fonterra chief executive Miles Hurrell. Luxon said this week marked a full year since the tax bracket changes National campaigned on had come into effect. "It's only through a strong economy that wages rise faster than inflation, that Kiwis can get ahead of their daily costs and our businesses can take risks that can mean that they can invest, grow, and create more jobs," he said. He directly targeted National's main rival in opposition. "Other parties in Parliament believe that raising taxes, growing the public sector, and giving more handouts to those who refuse to work is the answer. Taxing more, spending more, and borrowing more as Labour and others advocate for didn't work in the past and it won't work in the future." The government's decision to increase fees paid to board members on Crown entities - in some cases up to 80 percent - may undercut the messaging that National is prioritising low and middle-income New Zealanders' interests. But Luxon today pointed to the building products changes announced over the weekend, and the proposed ban on payment surcharges as recent examples. He then pointed to other items in the government's agenda, including: the current pipeline of infrastructure projects, Roads of National Significance, completing the City Rail Link, signing trade deals with the United Arab Emirates and Gulf Cooperation Council, starting negotiations with India, the digital nomads visa, and the Investment Boost policy. Willis soon picked up the baton, rattling off her own list of changes the government had made which she said had helped lower costs, including: the Family Boost policy, ending the Reserve Bank's secondary mandate to account for unemployment, curbing government spending, changing residential tenancy laws, tax deductability changes for landlords, delaying the previous government's petrol excise increases, scrapping the Auckland Regional Fuel Tax, increasing rates rebates for seniors, increasing Working for Families support, and extending maximum subscription lengths. She said National had campaigned on tackling the cost of living crisis, and pointed to rising GDP per capita and wages rising faster than inflation as a result of the government's interventions. "Taking the pressure off inflation - that is the general level of price increases across the economy - helps with the cost side of the cost-of-living equation. Lower inflation means less pressure on prices... it's pleasing to say that wages are now growing faster than inflation and forecasts show this trend continuing over the next few years." She said the government's tax changes meant "households have benefited by an average of $60 a fortnight". The change to interest deductibility for landlords had helped to take the heat out of the rental market, she said, noting "the 2.6 increase for the year to June was the lowest since 2011". She said the government was also making big structural changes, saying "the last government conclusively proved that band aids are not enough" and pointing to a series of policies yet to come to fruition: the Going for Housing Growth policy, Fast-tracking renewable energy consenting, work to address supermarket competition, and to curb council rates increases. "Economies are like oil tankers, you can't turn them around on a dime. But New Zealand is back on course," Willis said. The lists of government achievements kept coming, with Willis also pointing to: education reform, the investment boost (again), promoting global trade and investment, changes to the research and development sector, and "delivering infrastructure projects faster and better". Meanwhile, a Cabinet Office Circular reveals the government signed off on increases to fees available to board members of Crown entities. This includes increases of 30 percent for Group 2 and 4 boards and Audit and Risk committees, and an increase of 80 percent for Group 3 bodies. Luxon said the public sector director fees "have got completely out of whack compared to private sector fees". "Obviously we will never pay as much as someone in the private sector but when you are spending $32 billion on healthcare for example, it's important that we are actually able to attract really good governors for the Health NZ board, for example," he said. The changes took effect at the start of July.