Fonterra holds its domestic milk prices

Fonterra today announced that its Fonterra Brands New Zealand (FBNZ) business will freeze wholesale domestic milk prices for the rest of 2011.

CEO Andrew Ferrier said that international milk prices had risen steadily over recent months. FBNZ had already absorbed around $10 million of increased costs and with this commitment any further increases during the year will also be absorbed.

“We have seen world dairy prices go up by more than 26 per cent in the last six globalDairyTrade events. While these increases have had a big impact on raw material costs for FBNZ, we have only passed on an average increase of 1.4 per cent to our retail customers who ultimately set the price paid by New Zealanders.

“Looking forward global food prices are expected to remain strong. This is not just an issue for dairy or just an issue for New Zealand. There has been a fundamental change in supply and demand for food internationally which has pushed prices to their current levels.

“While these prices are good for food exports and the New Zealand economy, New Zealanders are feeling the effects of this in their shopping trolley.

”We recognise milk is an important part of the diet in New Zealand and we want to ensure that future generations of New Zealanders grow up enjoying it every day. It would be great to see retailers getting in behind this commitment for the benefit of New Zealand consumers.

Fonterra Brands New Zealand Managing Director Peter McClure said: “Global price increases will continue to impact the price that dairy manufacturers like ourselves pay, however, we want milk to remain an every day part of the Kiwi diet so we’ve made a commitment to absorb any extra costs for the rest of the year. “

Mr McClure said that although prices were high, drinking milk on a daily basis had real nutritional benefits and milk was still good value for money when it comes to getting your daily nutrition intake.

“Just 50 cents will buy you a breakfast of two Weet-Bix and milk.

“Through our KickStart Breakfast programme, partnering with Sanitarium, we are seeing the real benefits a nutritious breakfast provides school children. Since the programme started two years ago we have provided more than 1.5 million free breakfasts which is not only giving children a nutritious start to the day, but is also having a positive impact on their performance at school.

“A glass of milk will give a child around a third of their daily protein and calcium intake and up to two thirds of some vitamin requirements which is more nutrition for a much lower price than most fruit, vegetables and meat,” he said.