‘Retailers’ revenge’ could slow dairy recovery
While wholesale milk prices may be on their way up, we need to be aware of “retailers’ revenge” says a food marketing specialist.
I started watching this in 2011, when retail milk prices were rising rapidly and the Government told us the reason was our domestic market is tied to international prices. At the time, that sounded plausible.
So when the international milk price halved, yet our domestic prices continued to rise, I asked the Government what was going on.
It was a legitimate question. Milk is a basic commodity for Kiwi families and we want it to remain that way. No one wants to see higher prices putting parents off buying milk for their kids.
I’m still waiting – and still asking – for a straight answer to a basic question. Milk companies including Fonterra say it’s not their fault prices are so high. Supermarkets claim they are not to blame.
No one’s taking responsibility. Yet somewhere between farm gate and supermarket shelf there are markups. The mechanics behind them are opaque and secret.
Sadly Rural News chose to portray this story as an attack on farmers.
In fact, my whole point was that farmers aren’t getting any extra for their hard work, while others appear to be cashing in.
“Clearly it’s processors and retailers who are creaming it, because NZ farmers are getting less,” I wrote in my press release. “Farmgate milk prices dropped from 73c/L in 2013-14 to 38c/L in 2014-15, while retail prices rose.”
To be written by Rural News as dragging up a non-story makes me feel it’s the same old people having yet another crack at a Labour Party MP. You should at least be professional and get the facts right.
To me, as Labour’s consumer affairs spokesperson, milk prices are a legitimate subject. In this role I’ve questioned why electricity company profits have continued to skyrocket when demand for electricity is falling. I keep similar tabs on supermarkets, petrol prices and banks. It’s my job to make sure Kiwis are getting a fair deal.
I also want to see farmers getting their dues, and NZ households being able to afford milk as a family staple.
There’s no value in sitting back and accepting monopolistic practices, secret deals and distortions in the market as being legitimate.
• David Shearer is the MP for Mt Albert and Labour’s spokesman on consumer affairs.
