Why Vogel's bread is cheaper in the UK than New Zealand

Vogel's bread is more than$1.50 cheaper to buy in the UK. Photo / Jeff Brass

The sale of famous New Zealand bread Vogel's in the UK for a cheaper price than in supermarkets here has left one Kiwi expat scratching her head.

In the UK, a loaf of the bread sells for just over £1.50 ($2.86) at British supermarket chain Sainsbury's and $4.50 on average here in New Zealand. At Countdown a loaf of Vogel's bread can be bought for $4.50 or $7 for two, and at New World it sells for $4.49.

London-based Kiwi Nicola Kean spotted the cheaper-than-expected New Zealand-branded bread in Sainsbury's and tweeted about it.

"Vogel's is cheaper in London than it is in NZ. Seriously," Kean tweeted.

"I was mainly very curious about why a product I could only afford on special in New Zealand is cheaper in London - a city known for its high living costs."

A spokesman for the manufacturer of Vogel's, Goodman Fielder, said its final on-shelf price was determined by the retailer.

"Our wholesale price reflects a number of primary input costs including labour, ingredients, energy, and distribution. We are continually striving to make our business more efficient to keep our wholesale prices competitive," it said.

The product sold in the UK is made in that country, and not by Goodman Fielder.

New Zealand Food & Grocery Council chief executive Katherine Rich said the price difference was due to a number of factors, including that there was no tax on bread in the UK.

"For a start, there's no VAT [tax] on bread in the UK, while in New Zealand there's GST of 15 per cent. That will account for most of the difference," Rich said.

"Also, UK Vogel's is made by a different company to Vogel's in New Zealand, so there will be different manufacturing cost structures and specifications.

There model of "economies of scale" was also a contributing factor, she said.

"You can produce more items for less in a market of 65 million people, due to longer production runs, than you can in a market of 4.7 million people."

Vogel's is an Auckland-based bread brand which was founded in 1965.

The vast majority of food and drink in the UK is tax-free.