More shots fired in milk price battle
Date: 8 Feb 2012
Federated Farmers hopes a "price war" will ramp up after several stores slashed the cost of milk yesterday.
Nosh Food Market reduced the price of its Cow and Gate milk yesterday to $1 a litre, sparking one Pak 'n Save store across the street from its Hamilton store to match the price cut.
Nosh has stores in Auckland, Hamilton and Matakana.
Now Federated Farmers is calling on retail outlets, and particularly supermarkets, to do the same.
"If dairies can sell milk cheaper and a small supermarket like Nosh can sell it as a loss leader, surely Foodstuffs and Progressive can do the same?" said Federated Farmers Dairy chairman Willy Leferink.
"Federated Farmers hopes this milk skirmish is the first step in a wider retail milk price war between Foodstuffs and Progressive. It's happened in the UK and Australia so why not here?"
Big supermarkets rely on being convenient, Leferink said.
Nosh has reduced the price of its Cow and Gate milk by more than 50 per cent and said it will keep the reduced price until the end of the month.
Rob Chemaly, retail general manager of Foodstuffs Auckland, which owns New World and Pak 'n Save, said: "We can confirm that Foodstuffs will not be adjusting its prices in response to the Nosh discounts.
Progressive spokesman Luke Schepen, whose employer owns Countdown, said there were "no plans at this stage" to cut the price of milk. He accused Nosh of using marketing tricks to "bait customers into walking into their stores".
Consumer New Zealand praised Nosh and said there was no reason why the bigger chains could not do the same.
More at BusinessDay.
