Fonterra is getting on my nerves

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#1812511 4-Jul-2017 12:48

Pumpedd:

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.

Very small portion of their marketing budget, where being seen as a "good corporate citizen" is only a secondary motivation behind increasing sales with exposure to thousands of more children / families to the Anchor brand

Rikkitic

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#1812606 4-Jul-2017 14:27

sen8or:

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?

How about the government becomes more responsible and efficient in the way it spends taxpayer money? Then it might not need so much and no services would have to be reduced.

As far as GST goes, countries throughout Europe and elsewhere manage to have the equivalent of GST with exceptions and variable rates and somehow they manage it. Are we really so hopeless that we can't? This smells like a herring of the red persuasion to me.

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MikeB4

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#1812620 4-Jul-2017 14:46

Rikkitic:

sen8or:

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?

How about the government becomes more responsible and efficient in the way it spends taxpayer money? Then it might not need so much and no services would have to be reduced.

As far as GST goes, countries throughout Europe and elsewhere manage to have the equivalent of GST with exceptions and variable rates and somehow they manage it. Are we really so hopeless that we can't? This smells like a herring of the red persuasion to me.

There is managing and effectively managing. Europe is full of huge bureaucracies and complex tax regimes are a breeding ground for that. One just has to look back to our pre gst days when we had thousands of tax rates categories and exemptions, it certainly made accountants wealthy. GST across the board at a flat rate is the most efficient way to manage it and provides better tax returns.

sen8or

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#1812626 4-Jul-2017 14:57

There is always room for the Govt to be more efficient, no argument there, halve the number of MPs, reduce bureaucracy for the sake of bureaucracy etc etc etc, but we have to play with the cards we are dealt, not what we think should be in the pack to begin with.

I doubt its a case of "hopeless", just not cost effective, where do you draw the line at what constitutes essential vs non essential, (the classic I remember from Aus was cooked chicken attracts GST, raw chicken does not). By the time all the lobby groups fight to get their products in the excluded bracket, then as I said earlier, the costs of actually implementing and administering the system, any benefit maybe from a 15% reduction on a group of items is going to be negligible at best.

Fred99

13684 posts

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#1812629 4-Jul-2017 15:00

Rikkitic:

sen8or:

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?

How about the government becomes more responsible and efficient in the way it spends taxpayer money? Then it might not need so much and no services would have to be reduced.

As far as GST goes, countries throughout Europe and elsewhere manage to have the equivalent of GST with exceptions and variable rates and somehow they manage it. Are we really so hopeless that we can't? This smells like a herring of the red persuasion to me.

I believe that one of the (valid) reasons for no food exemptions is that there has to be an arbitrary cut-off, and that causes some crazy decisions. IIRC "bread rolls" are exempt in Aus - but not bread rolls with icing or filling. Cheese, bacon and lettuce are exempt, so I guess if you sold a bread roll as one item, along with a piece of lettuce, a slice of bacon and a slice of cheese separately - for the buyer to assemble - then that would be GST free. Or would it - you'd probably have to have some specific rule to avoid that, then there's no point having rules unless there's some bureaucracy checking. Seeds for your home vege garden are not GST exempt - because they're "not food yet". All kinds of craziness IMO.

Then in actual saving, as all the fixed costs in getting the food to you, fuel, fertiliser etc are still taxable, and that sale price at wholesale market hence retail price are somewhat determined not by "cost plus" but supply and demand, I wouldn't expect miracles in reduced food prices if GST was dropped - not least because the supply chain will absorb any savings.

Then if food was exempt, why not exempt other basics like healthcare. And so on - internet access is (or should be IMO) a basic right available to all, public transport. Then there's GST taxing taxes like rates and excises.

There's no "fair" tax system. Fixing NZ's very crappy low wages (relative to high cost of living) should be the #1 priority to address food affordability. It gets lip-service from all political parties - but very little action.

frankv

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#1812630 4-Jul-2017 15:00

clevedon:

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.

The farmer milking the cows, as a shareholder in Fonterra, demands the maximum return on his shares. So he sets the price that the retailer pays for the milk. It's the shareholders in Progressive Foods, etc, who also demand the maximum return on their shares, that set the the retailer's markup. Between the two of them, they set the price of milk that you pay in the shop.

dafman

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#1812653 4-Jul-2017 15:47

frankv:

clevedon:

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.

The farmer milking the cows, as a shareholder in Fonterra, demands the maximum return on his shares. So he sets the price that the retailer pays for the milk. It's the shareholders in Progressive Foods, etc, who also demand the maximum return on their shares, that set the the retailer's markup. Between the two of them, they set the price of milk that you pay in the shop.

There are farmers and retailers involved in setting the price in Australia as well. And, using the Herald's example, Australians are paying 25% less for their butter (after adjusting for exchange rate differences) than we do.

And Fonterra would have you believe that NZ dairy farmers are way more efficient than the Australians, so anyway you want to look at it, we are being (insert adjective of your choice).

And the retailer alone is not to blame.

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jmh

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#1812657 4-Jul-2017 15:50

I came across a study where they analysed the nutritional content of different types of milk:

Organic unpasteurised (i.e. raw) milk came out top with a high amount of vitamins, minerals and micro nutrients. You could almost live off it as a whole food if you had to.

Pasteurised milk reduced the level of micro nutrients but still had quite a few remaining. Probably not a bad trade off if you are worried about bugs in the milk.

Pasteurised and homogenised milk had lost pretty much all of its micro nutrients.

Low fat, pasteurised, homogenised milk was as nutritious as water - sadly this is what they are giving to the kids in low-decile schools.

I tend towards the idea that food should be tampered with as little as possible - that way you will be getting maximum nutrition with every meal.

clevedon

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#1812663 4-Jul-2017 15:58

frankv:

clevedon:

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.

The farmer milking the cows, as a shareholder in Fonterra, demands the maximum return on his shares. So he sets the price that the retailer pays for the milk. It's the shareholders in Progressive Foods, etc, who also demand the maximum return on their shares, that set the the retailer's markup. Between the two of them, they set the price of milk that you pay in the shop.

Unfortunately the farmer is a slave to Fonterra, they do not have a say in what they are paid - that is set by the Fonterra board via what the world price stands at.

I don't have the numbers handy, but what the farmer is paid per litre vs what the retailer sells it per litre is vastly different.

frankv

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#1812816 4-Jul-2017 19:18

clevedon:

Unfortunately the farmer is a slave to Fonterra, they do not have a say in what they are paid - that is set by the Fonterra board via what the world price stands at.

My understanding is that Fonterra is a Cooperative, wholly owned by the dairy farmers supplying it. So the farmers own Fonterra, get to choose the Board of Directors, and therefore get to set the company's policies. Collectively, dairy farmers think that selling milk in NZ at the world price is a good idea.

clevedon

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#1812820 4-Jul-2017 19:24

frankv:

clevedon:

Unfortunately the farmer is a slave to Fonterra, they do not have a say in what they are paid - that is set by the Fonterra board via what the world price stands at.

My understanding is that Fonterra is a Cooperative, wholly owned by the dairy farmers supplying it. So the farmers own Fonterra, get to choose the Board of Directors, and therefore get to set the company's policies. Collectively, dairy farmers think that selling milk in NZ at the world price is a good idea.

Again, the farmer does not stick the price sticker on the container of milk you buy.

1eStar

1604 posts

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#1812851 4-Jul-2017 20:17

Explain to me why Mainland triple churned butter is packed in Australia. From NZ butter. And sold here ¿

Technofreak

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#1812897 4-Jul-2017 21:42

I cannot understand the thinking some posters on here.

Neither the farmers nor Fonterra set the price. They are what's known as price takers, in other words they take the price the markets give them. Fonterra sells much of their product on the open market using the auction process.

The price they get for the likes of milk powder sets what price the retailers pay for your milk.

The farm gate price for milk has increased 52% in the last 3 years but is still 17% less than farmers were receiving 6 years ago. The 52% increase shows how bad the prices were three years ago.

How many Geekzoners are earning 17% less than three years ago. Interestingly even though some posters think Fonterra (and dairy farmers by association) are ripping off the New Zealand public, the price at the farm gate over recent years is less than Australian dairy farmers received. Remember Fonterra returns profits to the farmers as part of the farmgate price.

Truth be known Goodman Fielder, Puhoi, Lewis Road etc all buy their milk off Fonterra, though there are 6 other dairy companies they could buy from.

I don't think standardised milk, trim milk, calci milk etc is better for you than full cream milk in fact quite the opposite. All these low fat milks have been made popular by the "Eat Less Fat Brigade".

The less processed food is the better it is for you. However the processes that milk goes through is no worse than most other products we buy today.

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elpenguino

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#1812919 4-Jul-2017 22:05

jmh:

Organic unpasteurised (i.e. raw) milk came out top with a high amount of vitamins, minerals and micro nutrients. You could almost live off it as a whole food if you had to.

It actually is a totally 'whole' food and there are some creatures that can use it as their only source of nutrients, energy and so on.

Those creatures are called calves.

As far as humans go, milk is not essential.

There's been quite a charm offensive from fonterra in the last year or so. I note they have daisy's world or some such aimed at white washing dairy farming for the kids - of course they forget to mention that life is not great for baby calves who are unlucky enough to be born male whereas females 'just' get separated from their mothers shortly after birth.

That wouldn't go down well in a kids cartoon ......

When it comes to the environmental cost of farming, more so dairy farming, I have detected growing impatience in NZers lately. The myth of 100% pure is gone in many eyes - it is in mine.

So what do you think - is Fonterra winning the battle for hearts and minds?

Most of the posters in this thread are just like chimpanzees on MDMA, full of feelings of bonhomie, joy, and optimism. Fred99 8/4/21

Technofreak

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#1812944 4-Jul-2017 22:17

elpenguino:

When it comes to the environmental cost of farming, more so dairy farming, I have detected growing impatience in NZers lately. The myth of 100% pure is gone in many eyes - it is in mine.

Those people have lost sight of where much of their standard of living comes from either directly or indirectly. They are very happy to throw stones while at the same time are happy to accept the benefits. Double standards.

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