Consumers want answers, yet companies fail to Front Up

Media Release

17 September, 2014

Consumers want answers, yet companies fail to Front Up

New Zealanders are paying a premium for products but the companies who set the prices either don’t care or are refusing to justify their mark ups, according to Frontup.co.nz.

Big name companies, including Fonterra, Apple, and Nike, were asked by Frontup to explain the excessive prices Kiwis pay for the goods and services they provide, but all three failed to respond.

While the likes of Samsung, Steinlager and NZ Beef and Lamb did respond, of the almost 30 products and services reviewed in the past three weeks on the website, the majority of companies targeted did not take the opportunity of a right of reply.

Frontup.co.nz, which is written by a team of independent journalists and backed by Kiwi-owned ISP Slingshot, reviews the price of goods, compares the price to other countries, and then asks brands and companies to explain themselves by “fronting up” to give their reasoning for the premium cost of the product.

Slingshot general manager Taryn Hamilton says it’s clear from the hundreds of comments and responses on the Front Up Facebook page that consumers want answers about why they are paying so much.

“It’s just a shame most businesses couldn’t be bothered to respond, or seemingly don’t care about the high prices consumers are paying for their products.

“But probably the biggest reason these companies don’t want to front up is because there is no excuse for the higher prices New Zealanders pay compared to people overseas.”

The price of milk was one of the most startling cost differentials, with Fonterra’s Dairy Dale brand costing $1.70 per litre. In US a litre of milk costs the equivalent of NZ$1.20 and in Britain NZ$0.86. This is after taking into consideration our GST and exchange rate differences.

Fonterra, New Zealand’s biggest company, made contact only after stories about Frontup’s investigations, including the price of milk, were highlighted in a Sunday newspaper story and on TV One’s Breakfast. However, it didn’t follow through with a written response and justification for its prices.

Other examples of sky high Kiwi prices include:

• Nikes - $220 in NZ, equivalent of NZ$131 in US

• Sunglasses - $274.90 in NZ, equivalent of NZ$185.00 in US

• iTunes (NZers pay 35% more for same music as Americans)

• Lipstick ($19.99 at Warehouse, equivalent of NZ$6.65 in US)

Hamilton says consumers should continue the cost conversation that has been sparked by Front Up and make companies more accountable – and ultimately force them to front up.

“The goal of Front Up was to make sure Kiwis are treated fairly, and charged fair prices. That’s clearly not happening and now it’s time for the consumer to take the price they pay for goods and services into their own hands.”

He says there are a number of ways to do this, including everything from buying direct and importing goods from overseas, to contacting retailers and importers, local MPs, and Consumer Affairs Minister, Craig Foss, to complain.

“People don’t need to take the sticker price of an item as being what they have to pay. Everything is negotiable. Haggle and barter with retailers because they would rather have a lesser margin than not have a sale at all.”

ENDS

Slingshot is proudly 100% Kiwi owned and operated, and is the third largest ISP in New Zealand. Slingshot has deployed the largest Unbundled Local Loop network in New Zealand, having built access to over 150 exchanges throughout New Zealand. Slingshot is focused on delivering a great Kiwi service and creating local jobs with all staff, including the Contact Centre, based in New Zealand.

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