13 Apr 2011

Cheese and butter prices to rise again

1:22 pm on 13 April 2011

Shoppers will soon be paying more for cheese and butter as retailers pass on an increase in costs.

Fonterra Brands and Australasian food manufacturer Goodman Fielder have revealed they have raised their prices to retailers again.

The two companies supply the bulk of dairy products sold in New Zealand.

In February, Fonterra announced a freeze on wholesale domestic milk prices for the rest of the year, which supermarkets have accepted.

That doesn't apply to manufactured dairy products, Fonterra Brands says, because they're based on global commodity prices which the firm pays on the same basis as everyone else.

Fonterra Brands New Zealand managing director Peter McClure says the company put up its prices for cheese and butter on Saturday by between 4% and 8%.

He says consumers can usually expect to see prices rise within a few days of them coming into effect for retailers, however the company informed retailers of its price increases about a month ago and some may have bought extra stock, which could delay price hikes.

A nutritionist is warning higher prices for dairy products will mean lower consumption - which is a particular worry when it comes to children's diets.

An associate professor at Otago University's Department of Human Nutrition, Winsome Parnell, says studies show price rises definitely affect spending patterns - even when it comes to food staples.

Some may simply buy a smaller selection of dairy products, but for others it will mean being unable to afford as much milk as they would like for their family, she says.

Winsome Parnell says dairy products provide children with nutrients such as riboflavin and calcium which is particularly important for building bone density.

Mr McClure says milk, which is subject to the price freeze, is a critical part of nutrition and balanced diets, but cheese and butter are not quite the same necessities.

The Commerce Commission is considering whether there should be a full price control inquiry into the retail price of milk.