Background milk
Butter price becomes a political issue in New Zealand
Food prices being high on the political agenda is usually a phenomenon seen in poorer countries. However, prosperous New Zealand is now gripped by the price of butter. A price of NZ$8,00 per 500 grams is unacceptable to many New Zealanders. It must be lower.
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In the Auckland parliament, measures are being urged, and Finance Minister Nicola Willis is being urged to put pressure on Fonterra. She has since spoken with Fonterra CEO Miles Hurrell, but he points to the market. He explains that it's not Fonterra that's driving up butter prices; it's the global market that's driving them up.
For ordinary New Zealanders, however, it's hard to swallow. Last year, a 500-gram stick of butter cost barely NZ$4,00, now it's double that! Converted to euros, that NZ$8,00 is actually quite reasonable, because that's €4,11 for half a kilo (or two sticks) of butter; the Dutch can easily live with that. In New Zealand, however, the floodgates have opened.
There are serious calls to force Fonterra and other dairy companies to introduce a two-price system, with a reduced domestic price and an export price.
Hurrell, and with him the entire Fonterra board, firmly rejects this. They're putting the blame on the supermarkets, but they say they can't help it either. Butter looks set to remain expensive for a while. There's a near-global shortage of the product, including in the US and the EU. The cause is an increased use of milk fat in other products, a decrease in the production of regular butter and restrictions on dairy farming.