THE PRICE OF MILK: ARE WE BEING RIPPED OFF?

by Andr? Hueber
A thrift campaigner says Northlanders can save hundreds of dollars on milk by simply checking the label.
Whangarei-based Frank Newman is warning consumers to check milk labels, after conducting a milk price survey on his website - Living Off the Smell of an Oily Rag.
He said the cost of a two litre container of blue top milk could cost anything from $2.50 to $5, even though the milk inside was the same.
Fonterra owned the Dairydale brand which was the same milk as the premium Anchor brand, but with a less glamorous label, he said.
"It's pure marketing. The retailers know full well people rely on brands like Anchor and don't look at the price - they just pull it off the shelf." He described the practice as "what retailers do to maximise their income".
Families with children could save $4 to $6 a week - more than $200 a year - on milk, Mr Newman said.
By applying the label theory to other products, families could save more than $1000 a year.
Peter McClure, managing director of Fonterra Brands in New Zealand, said the company's Dairydale brand was cheaper because it was packaged in a cheaper format.
While Dairydale milk was the same as Anchor milk, the product didn't have the same "service back-up" as Anchor, did not have its own branded fridges and was not actively advertised.
He said Fonterra used Dairydale to accommodate a "value focussed" segment of the market.
The advantages of buying a brand such as Anchor included the "quality behind the brand name of Anchor," and an "ergonomically better bottle".
The Northern Advocate purchased a blue top two litre bottle of Dairydale from a service station - which traditionally would charge more for milk - for $4. A two litre bottle of Anchor was $4.59.
Mr Newman recommended people compare nutritional information on the back of milk bottles if they had reservations about quality.
"In this climate it's a case of buyer be aware." He suggested supporting independent milk companies which sold cheaper milk and brought "competition to an industry that really needs it".
Consumer NZ research manager Belinda Allan said consumers were getting a rough deal from a lack of competition. A 2008 Consumer NZ report on dairy prices highlighted the dominance of Fonterra and the lack of competition, at a retail level, amongst supermarket chains Foodstuffs and Progressive.
"Its difficult to find out what marks up the price - there's not much transparency. The commerce commission have looked into the issue but we understand it's not a high priority for them," she said.