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Cut to price of milk step in right direction

Cut to price of milk step in right direction - Greens

Green Agriculture Spokesperson Ian Ewen-Street today welcomed a planned decrease in the wholesale price of milk as a step in the right direction, although issues surrounding lack of competition in the processing industry needed to be addressed.

"I have long been concerned that the domestic price of milk has been inappropriately tied to the price our milk products fetch on the international market," said Mr Ewen-Street.

"Certainly when international prices for our milk products are high, so it seems are the prices for domestic consumers. However, despite sharp recent falls in the international prices for milk and associated products, the domestic prices for milk and dairy are still far too high.

"This practice is just not appropriate and is putting corporate greed before the health of many kiwi families who have had milk priced out of their reach."

Mr Ewen-Street said he agreed with comments from the Consumers Institute that the revenue received for New Zealand's milk products was not being handed on to farmers, but was instead being absorbed by the two processing companies.

When the dairy industry was restructured last year Mr Ewen-Street argued against linking the domestic price of milk to international export prices.

"Why should New Zealand families be paying ridiculous prices for such an important commodity when it is produced so cheaply and efficiently in their own back yard," he said.

"New Zealand consumers have been let down twice by the dairy industry. They are forced to pay international export prices for a cheap domestically produced product and then when that international price falls the domestic price remains artificially inflated.

"This cut is a good first step but unless the underlying causes of this price inflation are properly addressed - linking domestic and international prices and the lack of competition in the processing industry - it will make better economic sense for poorer kiwi families to drink coke over milk."

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