Nosh milk deal nails price at $1 less than supermarkets

Clinton Beuvink of Nosh Food Market. Photo / Supplied

A boutique grocery will sell milk for at least $1 a bottle cheaper than supermarkets in a deal it says is sustainable and exposes current mark-ups on milk.

Nosh has signed a deal with Green Valley to produce and bottle milk under a new Nosh Essentials own-brand label.

The milk will cost $2.49 for two litres - compared with $3.54 for Home Brand milk and $4.75 Anchor milk at Countdown supermarkets.

Yesterday both Consumer NZ and Federated Farmers applauded the venture and said pressure needed to be put on supermarkets' significant margins on milk.

Nosh has sold Goodman Fielder's Cow and Gate milk at $1 a litre since February.

The move was dismissed as a stunt by the Progressive Enterprises and Foodstuffs supermarket chains and cost Nosh close to $1 for each 2-litre bottle sold.

But Nosh director Clinton Beuvink said the Green Valley deal saved enough money for Nosh to offer the $2.49 price indefinitely.

He would not say exactly how much Nosh would lose on the new price, but said it was minimal.

"New Zealanders should be able to buy milk as cheap as anywhere else in the world."

Mr Beuvink hoped it would put real, sustained pressure on the supermarkets to reduce their prices. "There's no longer any mystery ... now I can really put that question mark out there. Either I'm a better negotiator, or else the [supermarket] margins are as high as we anticipated.

"If we're selling at $2.49, and they're selling at $3.49, and if the assumption is they're buying better than us ... then they are at least making $1 a bottle from the get-go."

Progressive Enterprises spokesman Luke Schepen said the company did not disclose margins made on products but viewed $2.49 as an unsustainable price across 160 supermarkets nationally.

Foodstuffs NZ managing director Steve Anderson said milk prices were directly driven by suppliers.

"We believe our customers are paying a fair price for milk. Our focus continues to be providing great deals on all grocery basket items, not just one or two."

But Consumer NZ chief executive Sue Chetwin said there was no doubt supermarkets made healthy margins on milk. "I hope it does put pressure on supermarkets."

Federated Farmers Dairy chairman Willy Leferink also welcomed the new lower prices.

Nosh Essentials 2-litre bottles will be available from April 16 in blue, light blue and trim varieties in all six Nosh stores.

The milk will be produced and bottled by Green Valley farms, based in Mangatawhiri.

MILK WARS

Price for 2 litres:

* $2.49 Nosh Essentials - Nosh
* $3.54 Home Brand - Countdown
* $4.75 Anchor - Countdown.