Fonterra boss rejects discounted butter prices for New Zealanders
The head of dairy giant Fonterra says the co-operative cannot and will not have different butter prices for local and overseas customers.
It comes after soaring prices for the household staple, with Stats NZ data showing the price of a 500g block of butter rising 46.5% in the year ended May.
Other dairy products such as milk and cheese have also recorded steep price increases amid global demand.
Fonterra chief executive Miles Hurrell fronted the media in Christchurch on Thursday, after a highly publicised – but regular – meeting with Finance Minister Nicola Willis on Tuesday, where the pair discussed the price of butter, among other things.
FFS – how many times do I have to spell this out to you sleepy hobbits?
We created a monopoly in the form of Fonterra to maximise price negotiations on the global market, but the flipside of that is that me as a consumer in NZ, for a product made in NZ, I’m competing with 500 million middle class Chinese who want this product.
NZ only has a population of 5million, we can never compete for price against 500million middle class Chinese.
Why should we be forced to pay the same price as the Chinese Middle Class can afford?
The Chinese Middle Class is forecast to grow to 787 million!
On top of that, this butter is created by a cow which takes water, pollutes water and generates climate warming emissions.
So this product, that I’ve already paid an environmental price in the manufacturing of, also costs me an arm and a leg price wise, because I’m competing with 500million middle class Chinese?
Why are we paying a price that is imposed upon us by a middle class market that is many times larger than our total population?
Why can’t we eat the harvest of our own nation?
NZ’s food system in ‘disarray’, scientist says
New Zealand’s food system is in “disarray”, with major cross-sector challenges to resilience, a leading scientist says.
There was a growing need for a national food strategy to improve the country’s food resilience, Te Whare Wānaka o Aoraki Lincoln University Professor Alan Renwick said.
Food systems needed to withstand shocks from international conflicts or disasters, as well as deal with accessibility and health concerns, he said.
One example cited by Renwick was of price shocks during the Covid-19 pandemic.
He said food price inflation during that time was more severe and persisted longer in New Zealand than elsewhere.
That was partly to do with a food system that was very reliant on imports and a concentrated agriculture system, he said.
“The idea to me about food system resilience is we’re able to maintain good access to food for our people, at a reasonable price, even when these shocks come along.”
He said the rise in food inflation in New Zealand since 2021 had resulted in further challenges for families.
“We need to understand how our food system and supply chains differ from other countries. Is it that supermarkets have too little competition? Is it a consequence of our export-focused primary production that is detrimental to our food supply?”
We keep getting told we feed 40million, but that number is based on us selling milk powder as a base line ingredient filler for the manufactured food industry. The PR spin pretends it’s wholesome NZ cheese and milk and meat those 40million are eating when the truth is the vast majority of what we export is basic bitch milk powder used as a filler ingredient!
A recent report on food security found NZ had incredibly low food security because it was so open market driven and refused to subsidise farmers.
Which is where we on the Left must drive the debate.
We should absolutely consider subsidising food grown by NZ farmers and horticulturalists and our seafood and meat and dairy that generates a 25% price reduction for all NZ produce consumed here.
For growers we need to protect our most productive growing land for food by giving those producers tax breaks to ensure they can continue to feed NZers first.
Rebuilding a direct link between the harvest grown here, the people who grow it and a grateful local market who enjoy the product WITH a 25% price reduction.
Climate change will kill global free market supply chains, we are locked into hyper-regionalism. We need to build new economic structures, subsidising NZ kai for the domestic market would lock in certainty for producers while strengthening food security for the population.
We have to find new ways of working together to ensure we can survive what’s coming.
Fitch Ratings analysts warned NZ last month that the next 10 years of economic growth was dangerously stunted.
This matters because it is ratings analysts like Fitch who warn the market if we are good for all the money we borrowed.
They base that on future projections of our economic cycle and their analysis is terrible.
Fitch have made clear to us that Dairy, Tourism and exports to China have waned and can not grow beyond the manner in which we have already grown them.
We have allowed free market dynamics to be created where we as Kiwis are competing against far larger markets for the kai that was grown in our own country!
Why shouldn’t our children eat from the harvest of our own nation?
Why have we allowed the corporates to take the kai from our nation and make us compete against far larger markets who will pay more than the domestic population in NZ can afford?
I’m sick of Fonterra’s excuses.
We created a Monopoly for them and these greedy fucks have trashed their social contract with Kiwis!
Get off your knees Kiwi, the Dairy Farmer ain’t your mate!
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No need to boycott Fonterra yet, the pricing is doing it for them with sales down for some due to affordability, and people reducing their dairy intake.
Farmers take endless handouts from the rest of us already for…ooh its too wet, ooh its too dry, ooh we did not police our own livestock transport across regions regulations, ooh climate change is too expensive for us to buy into…
It reminds of Air NZ–bailed out twice by taxpayers and they desert the regions.
Was rego day for my dog, paid it as have done for its life span, 13 years. Got a new council right as well, increase in the rego, from $94 PER YEAR TOO $105, if paid on time, aside from who asked me, was this farmer bleeting about the five dollar rise in his working dogs registration, meaning like,a working dog $10 BUCKS WITH ALL THE COUNCIL DOG CONTROL SERVICES PROVIDED, THAT INCLUDE DOG FARM disease immunisation that our home pets do not, yet their $10 BUCKS. IS like our Minister smiling saying, i have talked to the G.C.O. OF Fontera, and what, him coming out saying we are not here to play cut prices here. So his 6 insulting mil per year, is for us and us Trev!s to suck.
Can she talk to herself because the 40 bucks ayear increase in car rego bucks. But we’re all good because that’s making things better according to Alex Luxon.
Um maybe because farm dogs don’t walk in parks or down our streets or run on the beach, shitting in public areas & potentially spreading bacteria, nor are they an unleashed threat to the public.
A boycott of Fonterra within New Zealand only ensures that they will double down on their exports making the supply available in NZ even rarer thus more expensive.
Boycotting Fonterra products will only make them export all and every product they produce.Their answer, “Well nobody in NZ wants our product so we will export it all”
What ridiculous comments.
Farmers are on the job 24/7 regardless of the weather and don’t expect handouts for it.
The country has to export in order to provide all the things you take for granted. Would you rather see the country go bankrupt?
And who financed the construction of a concrete canal network,( the largest construction job under the Key Government) that zigzags it’s way across the South Island and bleeds rivers to flood paddocks to grow grass to feed the cows to create milk to create butter.
The taxpayer of course..
Yet another example of a company privatising the profits whilst socialising the costs.
Hurrell basically intimated that they are doing N.Z. a favour by selling butter to New Zealanders…. but they did it because they were obliged to.
Oh how generous and magnanimous !!
And for that he clips the ticket for $6 million a year for doing what exactly?
If he went under a bus tomorrow would that affect what Fonterra is taking in…not at all.
What a con that highly excessive CEO salary rort is…..This time it’s built off the back of taxpayer funded infrastructure and taxpayer funded cleaning up of the environmental
mess.
Petrol and oil is a lot cheaper in a country of source like Saudi Arabia than it is in N.Z.
Of course you can have a 2 tier pricing system.
We are being screwed over big time!
91 octane petrol in Saudi Arabia is 90 cents N.Z. dollars per litre…
In N.Z. it’s $2.50 per litre
Why aren’t the Saudis charging their own people $2.50 N Z. per litre?
The oil belongs to the country so they can set the price
Butter is made from milk sent to Fonrerra for resale so it is up to Fonterra to get the best price possible. By doing this both Fonterra and farmers make more money and pay more tax which runs the country.
In Australia we pay more for our own gas than Japan etc do for it.
Grant wins most stupid question of the century.
Bob troll wins most stupid comment of the century.
That is not an answer…clearly you don’t have answer!
We know.
But neither are the politicians our mates: Labour created the monopoly, Labour signed the “free” trade deal with China, National sold our electricity assets to irrigate the dairy farms so the few got richer at the expense of everyone = no one is going to fix the rort.
This country is corrupt and broken.
That’s a pretty fair assessment KCC
Butter gate is just another diversion away from all the other shit this government is doing .The same can be said for Winstons rant about kids wanting to play sport .Fuck if butter and polluted tourist areas and educating overseas students ,when we have no teachers and are closing poly techs ,is all we have to sell we are in deep shit .Every time we do a trade deal we push for meat and dairy even though we dont produce enough to fill any new quoter .Just look at the trade deal with Europe .Whoopie we can send an extra 10000 tonnes of beef up there .But wait a second, we dont have that many cows left to kill to fill the quoter so we will have to pay more and divert stock from another market .MEAN WHILE WE ARE IMPORTING BEEF FROM AUS TO FEED US DUMB HOBBITS .Soon we will all be eating chinese butter too if we arnt already
Diversion? Hit the nail on the head.
Yes Gordon and our CoC is extending foreign students hours they can work to 25 per week so that more youth competing for the same jobs at a time when we have high NEET numbers and high unemployment in our country. No census to hide stats they don’t want us to see high immigration of low skilled workers to further drive down wages. We appear to be going back to the past. The CoC don’t appear to have any solutions to the mess we are in.
“Get off your knees Kiwi, the Dairy Farmer ain’t your mate!”
So true, so why subsidise them. NZ only consumes 5% of dairy produced, 95% is exported.
15% discount is not nearly enough, make it 40% of the international price of milk, cheese and butter. Then Fonterra’s revenue will drop by a miniscule 2%. Barely a drop in the global milk pool.
Do the same with all food groups and other exports. Beef, lamb, seafood, fruit, veges, timber, etc.
Companies like Fonterra will actually benefit from this as reduced domestic prices means demand will increase here, which means less supply for export.
And a 2% decrease in supply for export means a 4% increase in global dairy prices and a roughly 8% increase in on farm profits. A win win for all.
The only reason they won’t do it is because Fonterra and farmers hate kiwis more than kiwis should hate them.
That’s correct,only 5 % of their total dairy production is available to the domestic market. So if they had a butter price ($4.50/per 500gms),for the domestic market it would hardly make a dent in Fonterra’s profit and will bring some faith back to the NZ public. If they don’t, watch out Fonterra.
I don’t get this, the freight bill alone to send it to the UK must be enormous.
True, Michal. Together with enormous carbon emissions from all that bunker fuel burnt into the atmosphere.
Willis is a fucking joke, there, I said it for ALL of New Zealand.
agree 100%,the whole meeting was jut a political stunt .Oh look at how tough I am ,.
Yes Gordon and our CoC is extending foreign students hours they can work to 25 per week so that more youth competing for the same jobs at a time when we have high NEET numbers and high unemployment in our country. No census to hide stats they don’t want us to see high immigration of low skilled workers to further drive down wages. We appear to be going back to the past. The CoC don’t appear to have any solutions to the mess we are in.
Yep, just a hollow gesture. No substance. Treat the electorate with disdain. And if you’re a bottom feeder or drop kick … well who cares.
Not ALL only the none thinkers.
ALL only the none thinkers.
Not for me Squeak, Im an educated person whereas you stand for the ignorant, which is their bliss.
Not for me Bob Troll, Im an educated person whereas you stand for the ignorant, which is their bliss.
Thru this they will loose the election, just on this one subject,butter
Butter price increased 50% in a year, food prices increased 3%.
80-90% of the price of butter is set by Fonterra but somehow supermarket margin pricing of the remaining 10% is the reason for high prices.
New Zealanders pay the highest possible price for a product that is made on the farm next door, pay for the pollution that this industry creates, and pay to hear the excuses from a CEO on $6 million a year telling us to our faces that these high prices are good for us.
The current government wanted to use free slave labour from unemployed NZers to repair the farms damaged from recent flooding, keen to sell NZ out to highest bidder but somehow not willing to pay market rate for skilled tradespeople. Essentially lowest-cost socialism for these butter-makers but highest price capitalism for the rest of us.
China has nothing to do with the greed of Fonterra. China’s success is in making products available to local and global markets at a fair price, not making food essentials unaffordable and driving people into poverty.
Our farmers will be squealing for a bail-out as soon as precision fermentation begins churning out milk solids, skipping those 10 million udders completely.
I’m sure they would get tonnes of our tax dollars if Foot & Mouth disease ever makes its way back in Aotearoa.
When farmers become redundant and no longer required just push them into the offal pit.
Put the land into better use.
Willis and Hurrell must think we’re stupid. What a useless looking individual he looked on TV, all very coy about what he’s paid (not earns) etc. They’re mates. She talked up her meeting with Fonterra for a week and came away with nothing. They had a good old chinwag about the old days and expect us to think there was a genuine meeting with Willis talking tough. Yeah, right!
What is it with butter? Everyone has a bee in their bonnet over a couple of extra dollars per 500gm pack. How much butter does the average consumer buy? Sure, I get it. Up 35% on last year I hear. But has been creeping up for a while. Along with just about everything. And Fonterra ignoring their social contract. What social contract?
It’s not the price of butter that is the thorn in the side. That’s simply a symbol for all that is wrong with the global market. Local consumers are expected to suck it up.
A two tier pricing system? You’re dreaming. Why butter? Why not wine, beef, kiwi fruit, or any of the stuff NZ exports? I’m pretty sure your $20 bottle of Sav would be half the price on the local shelf if overseas markets weren’t prepared to pay so much for it.
Thank you Bozo for some sense. See if all our other exporters are keen to drop their prices for locals , l think not.
It seems that it is wrong on so many levels starting with the monopoly of Fonterra. The common householder would like their staple foods on the table at a fair price. When Fonterra and the Supermarkets put the prices up and up to over 60% of what they were a couple of years ago we have started to protest. And the final slap in the face is when the fat cat CEO on his $6 million salary and bonuses says we should just get over it.
The head of Federated Farmers made it sound like we should feel privileged to occupy the same land mass as a block of butter from NZ grass feed cows. How do the Danish manage to differentiate pricing between domestic and international markets then? Is there simply no mechanism?
Might be time to look at the cost of all NZ made foods .Watties baked beans at new world on tuesday $1 per 100 grams ,Imported ones 49 cents per 100 grams including shipping from the other side of the world .
On the face of it gw a wraught. But not all baked beans are the same. In this case I’d rather pay the extra and get more beans for the buck. That’s if Consumer is correct.
What a bunch of moaners,upset that someone is making money and wont back down. Tell the banks,power companies and local councils to back off with there charges. I say you all suck.
What planet do you live on Graham. People do complain about power prices, and banks, and power companies. This wanker CoC doesn’t nothing about any of it.
Yep, let’s put the wine industry under the spotlight. $20 a bottle but propped up by the export market. Oh … wine’s a luxury not a staple! Wine’s for boozers not for bakers. So noone cares.
No, we all say you suck Graham, what an entitled arrogant prick.
The same can be said for other export products like timber. We get to pay export prices with our non export wages. This should be legislate so that the domestic market is supplied at say 20% less.
The same can be said for other export products like timber. We get to pay export prices with our non export wages. This should be legislate so that the domestic market is supplied at say 20% less. Other countries can do that.
At the end of the day we need farmers or we all starve. The real answer is that free trade agreements are not in NZers best interests. The more that exporters can export the less left behind for us. Really we should be taxing the hell out of the exporters as they are the ones laughing all the way to the bank while the rest of us wonder how we are going to pay the rates, insurance, powerbill put petrol in the car to get to work. Put food on the table. Forget a night out at even a cheep restaurant, let alone a expensive one.
The other thing the government is hoping everyone will forget is in alot of other countries ( Australia being one) most basic food is GST ( or in AUs case VAT) exempt.
At the end of the day we need farmers or we all starve. The real answer is that free trade agreements are not in NZers best interests. The more that exporters can export the less left behind for us. Really we should be taxing the hell out of the exporters as they are the ones laughing all the way to the bank while the rest of us wonder how we are going to pay the rates, insurance, powerbill put petrol in the car to get to work. Put food on the table. Forget a night out at even a cheep restaurant, let alone a expensive one.
The other thing the government is hoping everyone will forget is in alot of other countries ( Australia being one) most basic food is GST ( or in AUs case VAT) exempt.
We as citizens should be able to buy direct from farmers. Meat, milk, vegetables and fruit. It can be done. Feed the nation first.
Will Steak Gate be next?
The price of meat in this country is also outrageous.
Remove gst from locally produced food!
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