Prime Minister John Key doesn't want to tell adidas how to run its business - but says when you're in the hole, you should stop digging.
The sportswear company has come under widespread criticism from sports fans, former All Blacks and politicians over the pricing of its All Blacks' replica jerseys.
Major sports stores including Rebel Sport yesterday slashed the price of two replica jerseys, after failing to persuade adidas to drop its wholesale price.
Mr Key today said he did not want to tell adidas how to run its business, but added New Zealanders wanted to wear the jersey and were offended they could be bought cheaper online.
"The actions by Rebel Sport show you how sensitive people are and how much they want to embrace the World Cup," he said.
"I think realistically, I've always found when you're in the hole, you should stop digging."
Mr Key said adidas seemed to be selling to one market at a different price to another.
"Now Rebel Sports have taken the view they're going to eliminate their margin to effectively negate that. I guess it's a matter for adidas to make peace with their suppliers.
"But I think it's a shame that the New Zealand public are getting caught up in the middle of all this."
New Zealanders took a lot of pride from the jersey and wanted to support the All Blacks, but also wanted to pay a fair price.
New Zealand Rugby Union chief executive Steve Tew today said adidas was right not to drop the wholesale price.
"Not once they put it in the market, they've got a pricing strategy, it's very comprehensive ... anything they decide in New Zealand has to stick with their strategy in other markets and it's not as simple as looking at one pocket problem and dealing with it in isolation," he told Radio Sport.
"They've got to consider a wider range of issues and in the end we've said to them 'we don't expect you to tell us how to play test matches, we'll keep an eye on how things are going with our brand but ultimately the distribution and sale of our product in New Zealand is your expertise and we'll let you do it'."
Adidas was "in a very difficult position" as it could not openly criticise its retailers or release commercially sensitive information, Mr Tew said.
Meanwhile, sales of the replica jerseys have leapt following the price cut.
Rebel Sport owner Rod Duke today said there had been a noticeable increase in sales.
"They've gone particularly well, we announced it (the price drop) at 11 o'clock yesterday and through all Rebel Sport stores trading is very brisk."
The retailer knocked $50 off the price of the rugby World Cup replica All Blacks jersey, taking it to $170, while the standard All Blacks replica jersey was $30 cheaper at $149.50.
The row was sparked after the two shirts were listed on the www.worldrugbyshop.com website at $US89.99 ($NZ110) and $US79.99 ($NZ97.85) respectively, plus shipping.
Stirling Sports and Champions of the World matched the price cut by Rebel Sport, but Champions of the World managing director Gary Marshall said they would not be making a profit on the jerseys.
Mr Duke yesterday said he was upset adidas had refused to reduce its price.
"We happen to believe that this jersey belongs to the New Zealand public," he said.
"They don't own it. We all do. We cannot have a situation where New Zealanders would pay more for All Black jerseys than almost any other country in the world."
