Media Release: Dairy Workers Union (DWU)
Thursday February 9, 2012
Resumption of milk inquiry welcomed

The real pressure points of milk and dairy product pricing need to be exposed, and news that a Parliamentary inquiry on the matter will continue is welcome, the Dairy Workers Union said today.

Parliament’s Commerce Select Committee has today confirmed it will continue its milk price inquiry.

The Dairy Workers Union was among presenters at the committee’s first day of hearings in September last year.

The union’s national secretary James Ritchie said it was good that attention had shifted this week to the supermarket price of milk, because this recognised that the principal drivers of domestic milk prices were beyond the farm gate.

“We don’t believe that the price farmer shareholders receive for their milk is too high,” he said.

“The evidence suggests that it is the wholesale and retail margins on the price of milk that are inflated, which Consumer NZ have found is around 70% on the cheapest milk.”

James Ritchie said that the union remained concerned that a false understanding of the drivers of milk prices could put at risk the benefits that the co-operative dairy model brings to farmers, the provincial workforce and rural communities.

“The co-operative basis of the New Zealand dairy industry has been and remains the single most important foundation of this country’s success as a dairy exporter.”

“Despite evidence that it is the wholesale and retail price mark ups which are hurting Kiwi families, we have continued to see an intense focus from Fonterra’s competitors on the farm gate price.”

“This concern isn’t about the price New Zealanders pay for fresh milk, but is an attack on Fonterra’s co-operative structure and its better performance, by new processors who find it difficult to match Fonterra’s payout,” James Ritchie said.

ENDS

A copy of the union’s submission to the Commerce Select Committee inquiry is here: http://www.nzdwu.org.nz/uploads/file/DWU-submission-Milk-Price-Inquiry.pdf. Note – see paragraph 6.7, on page 12 of the union’s submission, for a reference to the Consumer NZ figure quoted in the media release.

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