Up-market Auckland grocer leads charge on lower milk prices

A boutique grocery is calling on retailers to make milk affordable as it drops its prices to $1 a litre.

Nosh Food Market says margins are too high and it hopes the lowered price can continue indefinitely if competitors and other parties come on board.

A recent Herald survey found that the price of milk was higher in New Zealand than in Australia, the United States and Britain _ despite some studies showing we have the lowest cost of production.

Nosh chief executive Clinton Beuvink said: "If a consumer is not happy about lamb, you can buy chicken. But if you're not happy about milk, you're stuck. That's why there's a moral case.

"Nosh isn't unique. There are a lot of other similar retailers that are more attractive than the supermarkets _ at small dairies, even petrol stations, you can get a discount for milk.

"If you live somewhere far away, don't drive across to see me - find your local dairy that's discounting and support them, and they'll be able to discount further.''

Milk was a money maker for supermarkets - with a profitability of about 30 per cent versus just 10 per cent for soft drinks, Mr Beuvink said.

"I really want to test the moral fibre of the big supermarkets, that this isn't where we should be making money. I want people to embrace the dairies because they're the ones that need our support.

"Saudi Arabia is an efficient producer of petrol, and they sell petrol there for $1 a US gallon, whereas everyone else in the world pays $4.

"They're providing a local benefit for something they produce.

"Milk is our white oil. I think it will be good to make it benefit New Zealanders. New Zealand [farmers] are really good-quality producers of milk; we should be leading the charge to make it affordable for Kiwis.''

Nosh will make a loss on each two-litre bottle of milk selling at $2, and will review pricing at the end of the month.

"If there are a number of interested parties to work on getting it at that price, it could be sustainable, but everyone would have to contribute,'' Mr Beuvink said.

He would be interested to see how the big supermarkets react.

"I would like to hope that this is a bit of a good campaign, and it's all about providing good products to New Zealanders at a good price.

"If this catches the imagination, there could be a good-news story that keeps going for a while with other people coming to the party.''

The idea is modelled on a similar campaign last year by Australian supermarket chain Coles. After it dropped its price to $1 a litre, competitors followed, though with protests that the pricing was hurting farmers and the Government should step in.

The Australian Competition and Consumer Commission, however, ruled that the major effect of the discounting was limited to supermarkets' margins.

Mr Beuvink said there were only six Nosh stores and he did not expect people to pile in - but the campaign could help dispel the myth that supermarkets were the cheapest place to buy things.

The brand to be discounted at Nosh from this morning is Cow and Gate, which is made by Goodman Fielder.

- Michael Dickison, New Zealand Herald