The "extortionate" price of Tasty cheese in New Zealand has sparked outrage after being compared to what Australian's pay for a Kiwi made block across the ditch - we talked to experts about why.
In New Zealand's Countdown supermarkets, a 1kg block of home brand Tasty cheese will set you back around $17.50, while a block of Alpine costs $17.30 and Mainland is $18.20.
However, in Australia's Woolworths supermarket, a home brand block of Tasty cheese costs AU$8.80 (NZ$9.33), while the Hillview brand - which is made in New Zealand - costs just AU$8 (NZ$8.48)
Social media users said they were horrified by the price difference which they found "hard to understand".
However, a Countdown spokesperson explained that the Tasty cheese which is found in New Zealand is not the same Tasty that's in Australian supermarkets.
"They are quite different products in Australia and New Zealand. Australian Tasty cheese is much more similar in flavour profile to a New Zealand Edam or Mild cheese. New Zealand Tasty cheese is matured for much longer and has a more developed flavour profile."
Blocks of Edam and Mild cheese are significantly cheaper in New Zealand (Countdown home brand NZ$10.60 for both types) but they are still more than Australian prices.
Consumer NZ chief executive Jon Duffy told Newshub New Zealand participates in the global economy and there's a global price for milk and milk products (including cheese).
This means Kiwi consumers are competing against Australian, European, American consumers and "if the price is right globally, we have to wear those prices and price increases".
"There's no subsidisation for New Zealand consumers, even if we are buying from a New Zealand company like Fonterra. There's a couple of things to note there, often - and it's a fair enough conclusion to draw - people think it's quite unfair if the cows are milked down the road, and their milk is to make my cheese - it's ridiculous that I'm paying $17.
"Don't get me wrong - I think $17 is an extortionate price for a kilo of cheese, but the factors that are at play are the international market and also our requirement under the international fair trade agreement."
Duffy also noted we charge GST on all goods and services, with no exceptions.
"There have been suggestions over the years that in order to promote healthy eating, GST should be taken off, for example, fruits and vegetables, and that could potentially include dairy products depending on your stance on the products, but as it stands it doesn't happen. In other jurisdictions, including Australia, there aren't GST on groceries."
He said "unfortunately there is not a lot that we can do about" the high price of cheese in New Zealand.
"If supermarkets are charging a fair margin and the increase in New Zealand has been set globally, there's not much we can do about that."
The Countdown spokesperson said there's a range of factors contributing to retail prices, including:
- the cost of the product that we pay to the supplier (which is generally specific to New Zealand)
- the cost to us to sell the product (including shipping, transport, distribution, paying labour through the supply chain, the cost of running our stores etc)
- GST of 15 percent is added at the end.
But at the moment, there are additional pressures on the price of cheese including high commodity costs, strong international demand for New Zealand dairy, rising labour costs and record-high farmgate milk prices.
"These are all things we navigate as we work with our suppliers to try and get the best value and quality possible for our customers.
"We know that price is incredibly important to our customers, and we’ll continue to work hard to make cheese as affordable as we can for Kiwis."
Concerns
Duffy said Consumer NZ's research shows Kiwis are particularly concerned about grocery prices at supermarkets.
"More than half of consumers who were recently surveyed have food and grocery costs as their greatest worry," he said.
"This is amplified among people who are renting and have even less disposable income because of the cost of rent. It is a serious issue and when it comes to staples like fruit and vegetables and dairy products for some families, when cheese prices itself out of reach of the average consumer, there is a real concern there, a real social issue."
