However, it’s not ruling out a further inquiry into how Fonterra sets the price it pays farmers and what it charges other processors.
If they’re doing that, should look at the whole supply chain.
The Commerce Commission report said there was enough retail competition between two major supermarket chains, dairies, service stations and other retailers.
I’m not so sure about that. Almost everything is more expensive at dairies, service stations and other small retailers. Those are the places you go for emergency supplies, not normal grocery shopping.
That leaves the supermarket duopoly.
It is difficult comparing prices here with those overseas because of the exchange rate and different taxes, but our observation at restaurants and supermarket during our recent trip to the USA and Canada was that food there seemed to be cheaper than it is here.
Some prices in a Walmart in Canada were: beef mince $9.50/kg; T bone $16.22; sirloin $11.10; stir fry $15.06; roast beef $12.06; bacon $10.44; pork tenderloin $10.96; pork chops $8.80.
I don’t have local comparison for these, but a New Zealand boneless leg lamb was selling for $14.92/kg at Walmart, I saw it priced at $29.99/kg at a New World here yesterday.
A frozen leg of New Zealand lamb was $13.62/kg.
It looked good but beside it were Walmart’s own brand of frozen loin chops selling for $20/kg. The bag was full of ice and had they been a tenth the price we might have contemplated buying them for dog meat.
Eggs were $2.98/dozen; skim milk cost $1.38/litre, full cream milk was $2.77/litre..
Cheddar cheese cost $13.43/kg which, taking the exchange rate into account, wouldn’t be much different form here.
The only thing that was far more expensive – and to our admittedly biased taste buds, not nearly as nice – was ice cream. A small cone cost $5.
Prices recorded at one supermarket and the gut reaction from purchases at other supermarkets and restaurants aren’t much to build a case on.
But our overwhelming impression was that food was cheaper and we wondered how much that had to do with greater competition between supermarkets there in contrast to the duopoly which operates here.
If there’s to be an investigation into food prices it needs to be a thorough one which includes retailers not just producers and processors.