Nicola Willis to ask Fonterra about high price of butter
Photo:
RNZ / Angus Dreaver
Finance Minister Nicola Willis will be asking Fonterra about the high retail price of butter in New Zealand.
Willis told
First Up
it didn't seem quite right that butter seemed to be cheaper in Australian supermarkets.
The price of a block of butter is now 120 percent higher than it was a decade ago, Stats NZ says. In the year to June it was up 46.5 percent
to $8.60 for a 500g block
.
At her regular meeting with the dairy co-operative this week she would be discussing what gets added to the cost by retail brands, including Fonterra's Anchor, and at the wholesale level.
"My frustration has been when you sometimes go on to an Australian supermarket website and see that butter appears to be cheaper there than in New Zealand, that doesn't seem quite right. So that's exactly the conversation I want to have."
"They'll have the opportunity to set out their case."
It was well understood the main driver of prices for dairy products was international demand and pricing, Willis said.
"But competition at the retail level does seem to have an effect on price, because organisations like Costco choose to have a really low price point on that product to get people in the door and the ultimate winner of all of that is the Kiwi shopper.
"So I'm talking to Fonterra about what they're seeing in terms of the supermarket pricing behaviour, what the margins are."
In May, Costco Auckland's special pricing saw
queues out the door
.
Federated Farmers dairy chair Karl Dean has urged retailers to lower prices quickly when costs go down, and said there was probably
very little Fonterra itself could do
.
"To put in it in perspective, there hasn't been any new players onto the domestic market in the last 10 years in terms of butter, other than the likes of Westgold - Westland have got their very premium product," he told
Morning Report
last week.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Otago Daily Times
17 minutes 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.
RNZ News
an hour ago
- RNZ News
Carpet maker Bremworth rebuilding Napier yarn plant
Carpet maker Bremworth is rebuilding its Napier yarn plant that was destroyed in Cyclone Gabrielle, which means 40 more jobs will be on offer. Before the flood it employed about 150 staff at the Napier factory, but most of them lost their jobs. For the last couple of years Bremworth has been importing yarn to bolster supplies from its Whanganui spinning plant. Bremworth CEO, Craig Woolford spoke to Lisa Owen. To embed this content on your own webpage, cut and paste the following: See terms of use.
RNZ News
an hour ago
- RNZ News
One year, 27,850 jobs gone Stats NZ latest data shows
Photo: 123RF New data shows there were 27,850 fewer jobs in New Zealand in June compared to the year before, and young people are feeling the impact of the weak labour market . Stats NZ's latest data shows the number of filled jobs was up 0.1 percent month-on-month but down 1.2 percent year-on-year. Compared to the year before, construction had lost 12,169 jobs, or 6 percent, manufacturing 5850 jobs, or 2.5 percent, professional, scientific and technical services 5150 jobs, or 2.7 percent, and admin and support services 4860 jobs, or 4.7 percent. Education and training and primary industries added jobs. People aged 15 to 19 had 10 percent fewer jobs, those 20 to 24 had 3.5 percent fewer and those ages 25 to 29 had 3.9 percent fewer. Hugh Hawkins, 23, has been looking for a job since finishing an honours degree last year. "Now we're in late July and I've managed to find a tiny bit of casual work through connections of people I know. Otherwise I've been serially ghosted with absolutely no success." Hawkins had set a target of 10 applications a week. "A couple of jobs I was excited for, I felt genuinely directly qualified for, I've gone for and not reached the interview stage. The rejection email often comes with a total of applicants they've had and one I was qualified for had 630 people apply." It seemed a widespread problem, Hawkins said. "Chatting to my coworkers they're virtually all in the same situation. They have to rely on the benefit to pay rent with casual work on the side. People from different walks of life, most young and very qualified…I worked hospitality roles through uni and took volunteer roles and internships relevant to my degree to set myself up as well as possible… if I'm struggling it must mean terrible things for what other people are also going through." Infometrics economists noted that May's month-on-month increase in filled jobs had been revised down in the latest data to a decline. "June's narrow rise could also be revised to flat or negative growth in future releases." Auckland had a 1.9 percent year-on-year fall in filled jobs and Wellington was down 2.3 percent. Canterbury was up 0.1 percent. ASB senior economist Mark Smith said it had been noticeable in the last year or so that young people were being most affected. He said there were likely to be more job losses than the data indicated because some businesses would have added roles during the year. "This is normally a cyclical phenomenon. The hope is that some will go into training if it's available but it's not available for everyone. "The labour market tends to be the last thing to move." He said it was concerning that the revisions in the data in recent months had all been down. "The trend is still falling. It has dragged on… Covid was huge and there are hangovers from that." He said the unemployment rate was likely to move higher in the coming months. Some people who had lost work had dropped out of the labour market, which meant the participation rate fell. The unemployment rate only counts people looking for work. "If that participation rate did not keep falling we would have a much higher unemployment rate, it would be closer to six. "Really the primary sector and the South Island are the good news stories. There is weakness still in the goods sector and the major centres." BNZ chief economist Mike Jones said he still expected the "mid-year activity air pocket" would pass. "The underlying drivers of the recovery remain in place and should reassert themselves in coming quarters. "But the recent weakness does push back the likely timing of the eventual labour market recovery. We doubt the current undershoot of firms' labour requirements relative to worker availability will change appreciably this side of Christmas. Our forecast peak in unemployment has been shunted out to 5.4 percent in the final quarter of the year. Wage growth should thus continue to slow through to the middle of next year." Green Party spokesperson for social development and employment Ricardo Menendez-March called on the government to "take charge and create jobs that help us build a better future". He said the Green Job Guarantee in the party's alternative budget would create 40,000 jobs to rebuild infrastructure, restore nature and build state housing. "We know people out there need opportunities, instead they are being punished and pushed into poverty."
