Media Release

26 May 2008

Drop Domestic Prices For Milk, Cheese And Butter

New Zealand First has called on the dairy industry to “smooth” prices for local consumers because of the financial struggle faced by people on lower incomes.

Economic development spokesperson Doug Woolerton said today that the public image of Fonterra and its associated companies were being harmed by sky rocketing prices for dairy products on supermarket shelves.

“The situation has been reached where many families are struggling to buy food produced on New Zealand farms and this is harming the reputation of Fonterra, which is seen as the public face of the dairy industry.

“New Zealand exports most of its dairy produce and the industry claims that it must impose world prices on the local market. However, consumers are surprised to find that some Australian cheese is cheaper than local varieties.

”We are sure that a more favourable pricing mechanism could be adopted such as that used for providing milk to independent dairy and cheese factories.”

Mr Woolerton also said he was personally surprised to find that Fonterra sent some New Zealand cheese to Australia for slicing and packaging, and then imported it back again to sell in local supermarkets.

“I have a package in my office and the label clearly states that it is sliced and packed in Australia from New Zealand cheese for Fonterra Brands (Australia) and then imported by Fonterra Brands (New Zealand).

“It’s a long way to send cheese to be sliced and people could well ponder the economics of adding high trans-Tasman freight costs to the price of local cheese.

“Fonterra has been given a privileged position in the New Zealand market. The company should think long and hard about where it stands before people start questioning this situation,” said Mr Woolerton.

ENDS

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