Carter rules out intervention on milk prices

Minister of Agriculture David Carter. Photo / Christine Cornege

Agriculture Minister David Carter has ruled out government intervention to keep milk prices down.

He said the Government would not provide subsidies to New Zealand consumers, and high international prices would benefit the economy.

"New Zealand is a country that exports at least 95 per cent of everything that it produces," he said.

"This higher pricing of all our commodities - milk, meat, wool, vegetables etc - means more money flows into the New Zealand economy, which means more money being available for domestic consumers."

On Thursday, Carter asked officials for a report to look at whether the market was competitive and whether one operator wasn't "gaming New Zealand consumers".

Green Party food spokeswoman Sue Kedgley today called on the Government to set up a full Commerce Commission inquiry into dairy pricing.

Consumer New Zealand has also called for a full investigation.

"The Green Party believes such an inquiry is long overdue," Ms Kedgley said. "There isn't any real scrutiny of retail prices and how they are set in New Zealand.

"We need much greater transparency into the pricing practices of the grocery retail sector, especially in areas like dairy where there is very little real competition."

Kedgley said the inquiry should investigate claims by farmers that they receive less than 30 per cent of the price of milk and why high international dairy prices are to blame for rising prices.

But Carter said an inquiry was not necessary at this point.

"Let's wait and get the report that I've called for, which at least will give us some indication as to how the competitive market is working," he said.

Fonterra on Friday announced it would freeze domestic milk prices until the end of the year after widespread criticism that milk had become unaffordable for many families.

However, the dairy co-operative's decision has baffled some in the dairy industry, who say it is unnecessary and could "end in tears".

Countdown, Woolworths and Foodtown supermarkets pledged to freeze their milk price for the rest of the year.

Foodstuffs - which covers Pak'nSave, New World and Four Square stores nationwide - yesterday said it would freeze its prices as long as suppliers did.

- NZPA