Dairy prices local

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#1137330 25-Sep-2014 11:51

Geektastic:
blackjack17: I have a feeling the word dairy is getting mixed up.

I assume the op was talking about dairy (milked based products) and how that Fonterra states that we have high prices in NZ because they have to match global prices. However when global prices go down, our prices don't.

Then follow up posters started talking about Dairies (corner store, milk bar, 7/11) as expensive/ poor quality.

agreed.

My point is that dairy products are expensive full stop. If Fonterra can sell Anchor to staff for $3 for 2 liters and $133 retail value of cheese for just $10 then we must look to the retailers be they supermarket or corner shop for the answer on why we pay so much.

You will find that the cheese she bought was stuff they cannot legally sell in supermarkets etc, this is because the weight of the cheese is a couple of grams under what the package shows. it's either sell this in a little shop in a little town where there is a huge presence of fonterra staff for very little or just chuck it in the rubbish. I've been to one of those shops, the really cheap cheeses like the one she bought would of only had less than a week expiry to go as well.

surfisup1000

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#1137337 25-Sep-2014 12:06

They interviewed a fonterra manager on the radio yesterday. He said they price on what the market will bear, not by the cost of goods. He said fonterra local prices will not be reduced. It made me a bit angry as I read into this that there is little competition to keep them honest.

So, fonterra pricing is like a ratchet ... moves just one way.

macuser

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#1137343 25-Sep-2014 12:13

If it was me I'd be pretty happy that I now get a better margin on my sales, and not reduce my prices as that's what people are already paying

But... I'm not a monopoly

Fonterra has been allowed to stay as a monopoly for so long because they told folks that the price was going to be better for them due to economies of scale...

This is the opposite of that

Geektastic

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#1137349 25-Sep-2014 12:20

surfisup1000: They interviewed a fonterra manager on the radio yesterday. He said they price on what the market will bear, not by the cost of goods. He said fonterra local prices will not be reduced. It made me a bit angry as I read into this that there is little competition to keep them honest.

So, fonterra pricing is like a ratchet ... moves just one way.

This is true of many things.

A friend of mine has a Vietnamese wife and spends most of the year in Vietnam. He comes back for 2 or 3 months to NZ most years.

His wife needed a pacemaker. After a variety of tests over several months, NZ insurers said they would pay for the surgery but not the actual part, which would be about $15,000.

He went with her to the top cardiac surgeon in Ho Chi Minh.

Done in less than 3 weeks, same identical pacemaker unit. Cost? $3500.

He asked the surgeon why there was such a difference and was told that the medical equipment companies sell the same parts but at the price the market they are selling to can afford.

Now, I understand this and it is of course inevitable.

What I still have trouble with is that NZ seems to be a place where things are sold at prices that the market cannot really bear. If milk was say 25% cheaper, it seems quite possible Fonterra might sell more of it, thus recouping any revenue lost when dropping the price.

It is, though, the supermarkets that add the most.

I note the Commerce Commission has been very quiet on that front in recent months....

old3eyes

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#1137352 25-Sep-2014 12:23

I seem to remember when Fonterra was being set up it's nick name was Mega Monopoly Company.. It turned out to be true..

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Old3eyes

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#1137363 25-Sep-2014 12:34

I don't really think of Milk as being expensive. We buy Budget brand from Pak N Save and it's $3.59 for two liters, usually. Over the past few weeks they have had the Budget milk on sale for $1.99 for 2L. A few ended up in our freezer.

If you buy the fancy stuff it can be expensive (Calci-trim etc).

Cheese does seem to be getting more expensive and we have adjusted our diet accordingly.

It is a shame that our prices are high when we make so much of the product here.

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Bee

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#1137414 25-Sep-2014 13:01

Having to pay Global prices in the country of origin is frankly disgusting and just plain greedy from Fonterra...
Have a look at what the pay for petrol in its country of origin... that's not global prices...

We pay more for things that come from overseas because of the extra cost to get them here, that I can understand but when things are made here we shouldnt have to pay more than other parts of the world. We should pay less!

Doing your best is much more important than being the best.

Geektastic

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#1137444 25-Sep-2014 13:17

Fabian:
Geektastic:
blackjack17: I have a feeling the word dairy is getting mixed up.

I assume the op was talking about dairy (milked based products) and how that Fonterra states that we have high prices in NZ because they have to match global prices. However when global prices go down, our prices don't.

Then follow up posters started talking about Dairies (corner store, milk bar, 7/11) as expensive/ poor quality.

agreed.

My point is that dairy products are expensive full stop. If Fonterra can sell Anchor to staff for $3 for 2 liters and $133 retail value of cheese for just $10 then we must look to the retailers be they supermarket or corner shop for the answer on why we pay so much.

You will find that the cheese she bought was stuff they cannot legally sell in supermarkets etc, this is because the weight of the cheese is a couple of grams under what the package shows. it's either sell this in a little shop in a little town where there is a huge presence of fonterra staff for very little or just chuck it in the rubbish. I've been to one of those shops, the really cheap cheeses like the one she bought would of only had less than a week expiry to go as well.

According to my scales it is all slightly over 500g. And the expiry date is April 2015.

Geektastic

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#1137446 25-Sep-2014 13:18

Bee: Having to pay Global prices in the country of origin is frankly disgusting and just plain greedy from Fonterra...
Have a look at what the pay for petrol in its country of origin... that's not global prices...

We pay more for things that come from overseas because of the extra cost to get them here, that I can understand but when things are made here we shouldnt have to pay more than other parts of the world. We should pay less!

Why?

If I can sell Widget A to Mr Chan for $10, why should I sell it to you for less? I would be losing money.

Geektastic

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#1137447 25-Sep-2014 13:20

macuser: If it was me I'd be pretty happy that I now get a better margin on my sales, and not reduce my prices as that's what people are already paying

But... I'm not a monopoly

Fonterra has been allowed to stay as a monopoly for so long because they told folks that the price was going to be better for them due to economies of scale...

This is the opposite of that

Unless you are a farmer...

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#1137453 25-Sep-2014 13:21

Bee: Having to pay Global prices in the country of origin is frankly disgusting and just plain greedy from Fonterra...
!

We have to pay more than global prices - that's the rip-off.

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Geektastic

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#1137461 25-Sep-2014 13:28

Sideface:
Bee: Having to pay Global prices in the country of origin is frankly disgusting and just plain greedy from Fonterra...
!

We have to pay more than global prices - that's the rip-off.

That depends on what you mean by global prices.

Do you mean 'the price of milk somewhere else' or 'the price Fonterra can sell it's milk at auction'?

They are not the same thing.

Dratsab

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#1137502 25-Sep-2014 14:04

I don't see the local prices ever dropping. We're a captive market and the producers have to try to protect themselves from the international shortfall in milk solid prices somehow. I'm actually expecting dairy product prices to increase.

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#1137598 25-Sep-2014 15:45

Geektastic:
Sideface:
Bee: Having to pay Global prices in the country of origin is frankly disgusting and just plain greedy from Fonterra...
!

We have to pay more than global prices - that's the rip-off.

That depends on what you mean by global prices.

Do you mean 'the price of milk somewhere else' or 'the price Fonterra can sell it's milk at auction'?

They are not the same thing.

I mean the price to the consumer in NZ vs. consumers in our export markets.

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SepticSceptic

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#1137646 25-Sep-2014 17:02

Get a cow

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