Cafe owner: 'NZ rip-off' author out of touch

An inner city café owner has struck back at a scathing column in the NZ Herald on the cost of everyday articles in New Zealand, saying the author is out of touch and living in a world of 20 years ago.

Roger Montgomery, of Swanson Sandwich Bar, said his industry was too competitive to be ripping people off and questioned whether British rugby writer Peter Bills' assessment of New Zealand was even relevant given the huge economies of scale between New Zealand and Britain.

Rugby writer Peter Bills - sounding a caution ahead of next year's Rugby World Cup - said the prices of everyday articles had "horrified" him and Kiwis were "victims of massive overcharging".

"This place is one of the most expensive I visit, one giant rip-off. And most of you seem unaware of it."

Former All Black Justin Marshall agreed New Zealand was an expensive country highlighting increases in the cost of purchasing coffee, petrol and lager during the past five years.

Montgomery pointed to the rising cost of raw materials including milk and cheese, as examples of pressures those in the food business were facing.

Figures out this month show cheddar cheese has increased 11.1 per cent in the past year, butter is up 27.6 per cent while the price of milk is up 4.4 per cent on the same period last year.

"These are the prices people are prepared to pay internationally for dairy - you can't expect dairy farmers of New Zealand to subsidise the local market," Montgomery said.

"I just don't think Peter understands the cost of running a business or providing a product," he said.

Adding his voice to nzherald.co.nz's debate on Facebook was Whangarei café owner Nigel Stowe, who said his business was paying 15 per cent more for coffee beans than two years ago, and was also preparing for a 2.5 per cent hike in the cost of GST.

"For all those people that think you are printing money selling coffee, think again, there's bugger all margin in it anymore - the competition is fierce and the customers unforgiving," he said.

Another Auckland café owner, an industry veteran of more than 20 years who did not want to be named, said it was a "daily fight to increase revenue and find ways to reduce costs".

Over the past five or six years the cost of everything had gone through the roof, she said.

"Rates and rent have almost doubled and the actual raw costs of production have increased dramatically, especially dairy."

Milk had gone up 50 per cent, labour costs had also increased and the price of coffee beans had reached a 12-year high on the New York Futures Exchange.

At the same time consumers were paying about $1 more for a flat-white than they were six years ago, she said.

Businesses were increasingly absorbing most of the costs, to remain competitive and avoid passing on a price shock for customers.

Keeping pace with others in the market required a "continual reinvention of yourself" with a focus on new products and new revenue sources, the woman said.

Asked whether there she believed there was any truth in Bills' comments that New Zealand was a rip-off, the woman said there would always be places - whether here or overseas - that would take advantage.