Fonterra is defending the price of retail milk in New Zealand and is suggesting that it is foreign interests that are whipping up the current furor. 

Fonterra Shareholders Council Chairman Simon Couper says foreign-owned dairy companies are exploiting the public and the government by driving the debate, in a cynical bid to keep their access to their milk at a regulated price – then export the milk and profits offshore.

“It’s in the best interests of independent processors in New Zealand, not Fonterra, to have a low milk price if they receive dearer milk off Fonterra, because they are actually going to take that milk and export it, and therefore they get a better return.

"Part of it, the foreign owned part of course – the dividend will leave New Zealand.

“Now the milk price in New Zealand is a reflection of the commodity market internationally and it’s fair that farmers get that return as they’re under the cooperative. The fresh milk prices, in New Zealand are a reflection of what the world market is doing.”

Simon Couper says that the retail price of milk in New Zealand is obviously not too high, if it were he says then suppliers would be looking to get involved in the market here – not continue exporting their milk overseas.  

The comments come on the back of a Commerce Commission announcement that it is conducting preliminary investigations to see whether a full-scale inquiry into the price of domestic retail milk is necessary.

Earlier this year Fonterra announced a price freeze on the price of milk from its end – following reports that Parliament was considering an inquiry of its own.

Yet there are milk companies in New Zealand that are supplying much cheaper retail milk to the public.

Country 99 TV visited dairies in South Auckland yesterday which were selling two two-litre Fresha Valley bottles of milk for just $5. At most dairies you pay $5 for a single two-litre bottle of Fonterra’s main brand Anchor.

Fresha Valley director Paul Jensen declined to explain how his company gets its milk to the market at half the price of Fonterra saying the company has contracts in place which forbid it from discussing what it does, or how it does it, with the media.

However, Simon Couper says cheaper milk is a reflection that it is an open market.

“It tells me that it’s a free market and that people have the ability to supply milk at this price – so nobody is compelling consumers to buy milk at the branded product price.

“You’ve got to remember that the branded products that Fonterra put out have taken innovation and have had capital put it to them – that’s your orange yellow and purple tops.

“In terms of actually getting simple milk it’s easily achievable by using these independent companies if people are concerned.”