Fonterra is getting on my nerves

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#1812376 4-Jul-2017 09:56

Geektastic:

Killerkiwi2005:

old3eyes:

I'm quite sure that the rest of the world does not pay the NZ price for items exported to us. We are subsidizing the export market so that Fontera can keep up it's big profit margins

Fonterra exports 95% of its products, I'm pretty sure we are not subsidizing it, what would be nice to see is the break down of what super markets pay wholesale, Also at least one of the political parties should raise removing GST from basic food items (milk, bread, vegetables etc)

Fonterra would simply say "If we can sell the milk to (insert foreign destination) for $Y, why should we sell it to you Kiwis for $Y - 20%?"

In response, I would simply say to Fonterra "The rest of the world (insert foreign destination) doesn't permit you to dump on their environment, screw up their rivers, yet you dump on ours, and steadfastly refuse to pay anything for doing so. You have entered into a social contract with the country, now it's time to start stumping up on your side."

Geektastic

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#1812378 4-Jul-2017 10:03

dafman:

Geektastic:

Killerkiwi2005:

old3eyes:

I'm quite sure that the rest of the world does not pay the NZ price for items exported to us. We are subsidizing the export market so that Fontera can keep up it's big profit margins

Fonterra exports 95% of its products, I'm pretty sure we are not subsidizing it, what would be nice to see is the break down of what super markets pay wholesale, Also at least one of the political parties should raise removing GST from basic food items (milk, bread, vegetables etc)

Fonterra would simply say "If we can sell the milk to (insert foreign destination) for $Y, why should we sell it to you Kiwis for $Y - 20%?"

In response, I would simply say to Fonterra "The rest of the world (insert foreign destination) doesn't permit you to dump on their environment, screw up their rivers, yet you dump on ours, and steadfastly refuse to pay anything for doing so. You have entered into a social contract with the country, now it's time to start stumping up on your side."

I suspect they'd say "We pay tens of millions in tax and employ heaps of people. We act within the law as it stands and will continue to do so if it is changed and thus alters our environmental obligations. Thanks for asking - cheerio!"

Geektastic

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#1812380 4-Jul-2017 10:07

MikeAqua:

I have oat milk on my porridge because it's good source of beta-glucan - a soluble fibre that help keep your arteries clean.

If I'm using cows milk I try and find pasteurised non homogenised whole milk. Homogenisation breaks fat down into smaller particles. There is some evidence (not entirely conclusive) that smaller fat particles are more readily absorbed by the digestive system. You may actually absorb more fat from homogenised trim than whole.

In Nelson I buy Oakland's milk (disclosure: I know some of the company directors). You can buy it at fill your own vending machines and quite a few of the cafes are using it for their coffees etc. In Wellington I buy eco-farm.

IIRC correctly, oats themselves are also. Do you feel you need to double down on beta glucan?

The only thing I find off-putting about non-homogenised milk is that sometimes the fat sets in lumps that shaking does not break up. Lumpy milk reminds me of gone off milk too much - also the reason I can't stomach yoghurt.

sen8or

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#1812382 4-Jul-2017 10:07

Fonterra act with dairy pricing no differently than the oil companies act with petrol pricing. When there is downwards pressure on pricing, they are slow to react and blame whatever excuse they can think of as to why the price drop isn't being passed on to the consumer (it has already been factored in, price changes don't happen immediatly due to futures etc etc etc), but, someone only has to pass gas in a manner that might offend someone in the middle east, and bam, the price goes up because of "environmental uncertainty".

Were the farmers voluntarily paying additional money to the Government when milk price was at the $8/kg milk solid mark? Not bloody likely, yet when it got tough, they all had their hands out.

Hypocrites

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#1812387 4-Jul-2017 10:12

Farmers certainly are in an interesting position.

On the one hand, we claim not to have subsided agriculture and, in the literal sense, we do not, at least as far as pricing of produce goes.

We do however subsidise them in other ways - by relatively loose environmental law and regulation, relatively loose Health & Safety law (at least until recently) and by literal bungs of cash whenever there are things like droughts etc.

They are of course big earners of overseas income for the nation. However, so are tourism businesses which seem to get less favourable treatment than farmers.

sen8or

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#1812392 4-Jul-2017 10:22

Killerkiwi2005:

old3eyes:

I'm quite sure that the rest of the world does not pay the NZ price for items exported to us. We are subsidizing the export market so that Fontera can keep up it's big profit margins

Fonterra exports 95% of its products, I'm pretty sure we are not subsidizing it, what would be nice to see is the break down of what super markets pay wholesale, Also at least one of the political parties should raise removing GST from basic food items (milk, bread, vegetables etc)

I think the Greens do bring up GST on basic items come election time as a way of trying to appeal to a wider group of voters, its a popular bell to ring even though it'll never happen and even if it does removing GST from some items will never work -

1 - As it stands, GST is a simple tax to administer, from both a commercial and a government point of view, applied evenly across the board at a standard rate.

2 - As soon as you start introducing exceptions, there has to be tremendous infrastructure changes to IT systems to facilitate GST status of individual items / categories. Who is going to pay these costs do you think? Companies, cause they are good blokes who don't mind wearing extra costs reducing profit to shareholders? (Maybe its the IT industry lobbying for Government to make a change, they havn't had a big cash cow to milk since Y2K)

3 - Even if they didn't pass the massive costs of infrastructure change onto the consumer, how much of the GST reduction will get passed onto consumers? Given the duopoly that we are currently in with major supermarkets, 2 fifths of sweet f all would be passed on would be my guess.

4 - Legislate to make them pass it on, sure, that'll work.....

5 - The GST tax take for the Government is an important element of paying for running the country. No one wants to pay more tax than they have to, but if you reduce the tax income of the Government, then somewhere on the other side of the ledger, there has to be a reduction in spending (or increased borrowings to pay for it), which services should we reduce spending on?

dafman

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#1812402 4-Jul-2017 10:37

Dairy farmers are intent on charging domestic users the full market price for their product.

Dairy farmers should pay the full market price for what they consume as well. See this policy from the opportunities party.

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Pumpedd

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#1812407 4-Jul-2017 10:49

sen8or:

Killerkiwi2005:

old3eyes:

I'm quite sure that the rest of the world does not pay the NZ price for items exported to us. We are subsidizing the export market so that Fontera can keep up it's big profit margins

Fonterra exports 95% of its products, I'm pretty sure we are not subsidizing it, what would be nice to see is the break down of what super markets pay wholesale, Also at least one of the political parties should raise removing GST from basic food items (milk, bread, vegetables etc)

I think the Greens do bring up GST on basic items come election time as a way of trying to appeal to a wider group of voters, its a popular bell to ring even though it'll never happen and even if it does removing GST from some items will never work -

1 - As it stands, GST is a simple tax to administer, from both a commercial and a government point of view, applied evenly across the board at a standard rate.

2 - As soon as you start introducing exceptions, there has to be tremendous infrastructure changes to IT systems to facilitate GST status of individual items / categories. Who is going to pay these costs do you think? Companies, cause they are good blokes who don't mind wearing extra costs reducing profit to shareholders? (Maybe its the IT industry lobbying for Government to make a change, they havn't had a big cash cow to milk since Y2K)

3 - Even if they didn't pass the massive costs of infrastructure change onto the consumer, how much of the GST reduction will get passed onto consumers? Given the duopoly that we are currently in with major supermarkets, 2 fifths of sweet f all would be passed on would be my guess.

4 - Legislate to make them pass it on, sure, that'll work.....

5 - The GST tax take for the Government is an important element of paying for running the country. No one wants to pay more tax than they have to, but if you reduce the tax income of the Government, then somewhere on the other side of the ledger, there has to be a reduction in spending (or increased borrowings to pay for it), which services should we reduce spending on?

You cannot and should not legislate for everything. We have been there with Muldoon and that worked so well. It seems in some of our larger industries (Dairy, Petrol and Supermarkets) we are either lacking real competition or the watchdog charged with supervising unethical practices is out of their depth.

Athlonite

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#1812409 4-Jul-2017 10:52

MikeAqua: You may actually absorb more fat from homogenised trim than whole.

Funny you say that, socalled "Trim milk" is what used to be feed to pigs to fatten them up

I don't really have a problem with fontera using the permeate in the way they are but I do have an issue with them not stating it on labels and as for them saying it's to standardize it well it's probably actually to just make it go further so instead of getting 1.75ltrs of unmolested milk you now get 2ltrs of standardized milk

Pumpedd

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#1812472 4-Jul-2017 11:47

Remember they do supply schools with free milk....being a cynic, nothing is ever free, i suspect we pay for it in higher dairy prices.

Geektastic

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#1812484 4-Jul-2017 12:01

Athlonite:

MikeAqua: You may actually absorb more fat from homogenised trim than whole.

Funny you say that, socalled "Trim milk" is what used to be feed to pigs to fatten them up

I don't really have a problem with fontera using the permeate in the way they are but I do have an issue with them not stating it on labels and as for them saying it's to standardize it well it's probably actually to just make it go further so instead of getting 1.75ltrs of unmolested milk you now get 2ltrs of standardized milk

Given that standard blue top milk is only 5% fat, I have never really understood the obsession with skimmed and semi-skimmed, which originally existed only because people want to buy cream. I suspect it's a marketing ploy to flog off the waste from cream production...!

frankv

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#1812491 4-Jul-2017 12:08

Geektastic:

Fonterra would simply say "If we can sell the milk to (insert foreign destination) for $Y, why should we sell it to you Kiwis for $Y - 20%?"

The obvious answer is "Because you're not having to pay to transport it to (insert foreign destination)".

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#1812500 4-Jul-2017 12:19

frankv:

Geektastic:

Fonterra would simply say "If we can sell the milk to (insert foreign destination) for $Y, why should we sell it to you Kiwis for $Y - 20%?"

The obvious answer is "Because you're not having to pay to transport it to (insert foreign destination)".

They may not be paying the costs of doing that, depending on the basis they sold the product. Their costs could end at the dockside when the product is loaded. I do not know, but that is possible.

clevedon

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#1812503 4-Jul-2017 12:26

dafman:

Dairy farmers are intent on charging domestic users the full market price for their product.

The farmer milking the cows does not set the price of milk that you pay in the shop - the retailer does.

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#1812506 4-Jul-2017 12:34

old3eyes:

Technofreak:

Pumpedd:

Our dairy products didnt drop by very much during the darkest days of the low dairy prices.....yet they are going up now because of it.

Aussies get cheese, milk and butter much cheaper than us.

Fonterra is routing kiwis!!

It also seems cheaper supermarket milk brands have much more permeate.....!!!

I'm not so sure Fonterra is scamming Kiwis. Given the prices of dairy products have been severely depressed until recently and that New Zealand dairy farmers are the most efficient in the world and were struggling with the payout from Fonterra I'd suggest Fonterra wasn't doing any scamming. Remember the farmers own Fonterra so surpluses are returned to the farmers in their payout. If there's any scamming going on perhaps it's in the supply chain between Fonterra and the consumer.

I'm quite sure that the rest of the world does not pay the NZ price for items exported to us. We are subsidizing the export market so that Fontera can keep up it's big profit margins

I'm sure that they do not; however, it's a hard comparison because we do not know how much the net prices are. For example, if an item made in the US sells for $100 net from the manufacturer, in the US the market competition usually results in very competitive sales tactics, often setting a 'street price' well below the MSRP.

In NZ, the same item selling net at $100 is immediately pinged with GST and import duties then probably goes to a distributor who then adds 100% and sends it to the retailer, who may well be in a monopoly or duopoly position in many cases, and they add 100% and sell it to you...(then complain that you can buy it without GST from the USA...!)

So it's hard to know how much of what we pay in NZ is actually the result of the special NZ Tax and how much is a result of a difference in net pricing.

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