Fonterra Milk Decision: FGC response

Press Release 18/02/2011

“Fonterra deserves high praise for its decision to further subsidise theNew Zealandmarket at significant cost to the company, says Katherine Rich, Chief Executive Officer of the New Zealand Food and Grocery Council.

“The commitment made today to hold prices through to the end of the year should be welcomed by consumers.

“At the same time it is important to correct some misleading assertions that milk has somehow become a luxury item inNew Zealand.

“Milk is a key part of a healthy, balanced diet and remains one of the most affordable ways to feed our families good nutrients, particularly at breakfast time.

“Looking at figures collected by the Department of Statistics, in real dollar terms some milk is actually cheaper than it was 10 years ago.

“I know that this goes against the sense that many Kiwis have about rising costs, but price increases never occur in an economic vacuum.

“While the costs of many products and services have increased over time, thankfully so have the average incomes of New Zealanders.

“This is a big financial commitment by Fonterra and we hope other Kiwis have some understanding and appreciation of just how significant this decision is, said Mrs Rich.