The Great NZ Dairy Ripoff – Fonterra Fess Up
“The market to grow and New Zealanders to consume more milk, that’s our aim. So we price what the market can bear, we follow inflation and we don’t follow highly volatile commodity markets” says Theo Spierings, Fonterra CEO, speaking on TVNZ OneNews today.
So “we price what the market can bear”, indeed ! Yes, folks, the Fonterra CEO has made clear that he will completely ignore market changes and over-charge New Zealanders for essential food products. Nice. What seems strange is that no-one is complaining very much. Is Fonterra entitled to a Section 43 exemption from Part 2 of the Commerce Act ? Or a Partial Exemption under Section 30 of the same legislation ? Wholesale prices have dropped by 40% but seems Theo can set whatever price he wishes for New Zealand consumers. Whether this is an attempt to ensure farmers do not suffer from the global price-drop or just a way to line other pockets, it remains a disgrace that New Zealanders continue to be let down by the monopoly dressed as collective bargaining arrangement. Still, Fonterra dividends have not suffered. So that’s all right then !
With no hint of shame, Theo also chose, at length, to point out the upside – that lower payouts to farmers mean Fonterra can make more money from food processing and consumers :
“A lower forecast Farmgate Milk Price reduces input costs in our consumer and foodservice businesses. In turn, we do expect to deliver increased returns as a result of a recovery in margins on our products.”
Can’t see the government doing much on this one. Feeling a hint of regret at helping to return National last Saturday ? Admittedly, it was the only possible vote in the face of the motley opposition collection. Oh well. Treble milk-shakes and whiskey chasers all round at Theo’s Viaduct Harbour HQ. Bottoms’s up.
Have Fonterra contravened the Commerce Act ?
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