Editorial: Discount on milk bold move

People of a certain age have fond memories of milk being delivered to their homes. There was something comforting in hearing the truck rumbling down the road and the rattle of glass bottles outside the front door. It was a quaint little service which like so many things from yesteryear has been swept aside in this fast-paced world.

The sad reality is that even if those type of services were available now, it would probably cost you an arm and a leg. In this age of fastfood and instant-everything, it is simpler for you to go wherever you want 24 hours a day (in some areas) to get whatever you need.

It is, however, even getting to the point where it is too expensive to pop to the dairy to buy bread and milk. Rather, stock up with bread and milk when you go to the local supermarket. You can understand that the local dairies believe they are being squeezed by the producers and distributors and therefore want to make a buck or two on products like milk. But in tight economic times, it does stick in one's throat a bit when you don't get much change from a tenner for your loaf of bread and two-litre milk.

This is why it has been refreshing to see local Havelock North shop, Bellatinos Food Lovers Market, following the lead of an Auckland boutique grocery and selling milk at discounted prices. Obviously, it is not an act of charity as they know they will get returns, but good on them for taking the step. And surprise surprise, the milk has been flying out of the door. So much so that the owner Bart Narracci said he has had to execute his back-up plan - get more milk.

His philosophy is a simple one - get people through the door and they will buy other things as well. You also create goodwill and increase your customer base.

It does beg the question - should the price of basics like bread and milk be capped at a certain price? Some would argue not, but there certainly have been calls for transparency in milk pricing.

The National Government has pushed forward its Dairy Industry Restructuring Bill in which it plans to restructure the dairy industry in a bid to give it control over milk prices.

The Government says the bill will provide transparency over the price of milk, but Fonterra's shareholders, the farmers, say it will make no difference to the retail price paid by customers because it is the retailers who are charging four times what farmers are paid at the gate.

I am not sure who is right, but that is not the point.

Frankly, the customer does not care if it is the farmer or the retailers' fault, they are just sick of paying exorbitant prices for milk. When they get the opportunity to express this, they do so. This is why when retailers like Bart Narracci put longer-term customer satisfaction ahead of short-term profit, they reap the rewards. Let's hope more retailers see the light.