How did imported butter become cheaper than NZ butter?

French butter brand Petit Normand began flying onto New Zealand supermarket shelves nearly 18 months ago.

At that time, there was no global butter crisis and butter prices were fairly stable.

LIfe Juices director Galib Mahmudov told NZH Focus he bought Petit Normand for the quality rather than price in June last year.

He says the "light and fluffy" butter can't be compared to New Zealand's butter.

NZH Focus found in June this year that Petit Normand was just as cheap as the cheapest New Zealand butter brand at the time, Anchor, at $4.99.

Mahmudov says he could sell the butter cheaply then because he had imported plenty of stock to meet demand.

Fonterra's director of operations and supply chain, Mark Leslie says subsidies in other parts of the world also bring down the price of overseas butter.

"Other parts of the world have a lot more subsidies in their industry so they [have] subsidised milk production, which can mean at times they've got surplus product and that drives lower butter price," he says.

"It's not a level playing field with a lot of those international trade regimes."

Mahmudov says he's held off for as long as he could but he's now had to put up his prices.

"We have no other choice because we're running out of the old stock and we're bringing in the new stock and we have to match the prices."

Mahmudov says he isn't worried about sales, judging by the large number of bakeries he's had to turn away in recent months.

He adds the global butter crisis is a worry but in one part of the world - coincidentally where he's from - Azerbaijan, it's just been made a little easier for New Zealand.

"It's good news that the Azerbaijan government will reduce the Customs duty for butter from 15 to five per cent in December."

The former Soviet republic is the biggest consumer of New Zealand butter per capita in the world.

Fonterra welcomed the decision to allow better access to Azerbaijan's market, which last year was worth $39 million.