The warehouse is selling two 2 litre bottles of milk for $6.50 when one 2 litre bottle cost $3.68 on average.
The Warehouse CEO, Mark Powell, says, “The company remains dedicated to reducing the cost of essentials for New Zealand families, and that means keeping the cost of milk down.
“Milk is a basic living cost for families and last week’s ‘bundle deal’ – two 2ltr bottles of milk and two loaves of bread for $9 – is part of our on-going commitment to delivering exceptional value to our customers.”
This can’t be having much of an affect on supermarkets’ market share yet or they’d be dropping their prices too.
Supermarkets in Australia are having price wars over milk and it’s the customers who benefit.
How many customers will the Warehouse have to woo before supermarkets here are forced to drop their prices too?
Prime Minister John Key sees opportunities for New Zealand to help China with its food safety standards.
He’s right but with the opportunities come risks, one of which is an association with New Zealand or New Zealand companies and their products if standards aren’t up to scratch.
Another is the difficulty of transferring our standards to a country with a very differenct culture, customs and ethics.
The significance of Fonterra chairman Henry Van der Heyden accompanying Key hasn’t been missed. The company was badly bitten by its involvement with Sanlu but is looking for fresh opportunities in China.
They will have learnt from the Sanlu disaster, but I’m not yet convinced they have learnt all the lessons and realise all the risks.
One of these is the danger of selling infant milk powder in a country where companies don’t abide by the International Code of Marketing Breast Milk Substitutes.
The code was developed by the World Health Organisation in 1981 and prohibits almost all advertising of breast milk substitutes to the public.
If Fonterra is associated in any way with companies which disregard the code it risks an international backlash.
Baby Milk Action is an organisation which monitors the baby food industry. Its website shows Sanlu advertisements which contravene the international code and it has a campaign to boycott Nestle because it breaches the code.
If Fonterra wants to invest and operate in China it must not only ensure that the animal welfare and food health and safety standards which it requires in New Zealand are adhered to there, it must also ensure none of its produce is advertised in breach of the ICMBMS.