Aucklanders fed up with unaffordable dairy prices are driving across town to buy cheap milk in bulk from a Mt Wellington superette selling at cost price.

Satish Masters, owner of the Harris Rd Superette and Lotto, said customers from wider Auckland suburbs stopped in to his store to buy up to 12 litres of milk in one purchase. The superette sells 2 litre bottles of Dairy Dale milk for $2.90 per bottle - up to $2 cheaper than some supermarkets.

The superette has sold Dairy Dale Lite and blue milk for five years. Mr Masters said he makes a loss on each bottle sold, but doesn't mind because it brings in the customers.

"It's really a loss-leader and people here love it. It's something for the community. A lot of people can't afford milk. We don't like losing money but we have to survive, we have to lose on one item to make money on another."


He said milk lovers travel 15 minutes from Epsom and Mt Eden to buy up to 10 litres of milk at once. The superette's other customers included local companies and a restaurateur who buy up to 12 litres of the milk every few days, he said.

"It's an everyday product. It's a huge product, everyone drinks it. I actually hear customers say they come in and buy it because it's $2.90 and they can afford it."

Dairy Dale is supplied by Fonterra, and sold for a cheaper price alongside the company's main brand Anchor - even though it's exactly the same milk.

The product is not available for supermarkets to buy because of the existing home brands.

The demand for the cheap dairy product was phenomenal, he said. Mr Masters sells 15 to 18 crates a day - up to 324 litres of milk a day. The milk fridge is empty by 8pm, and is restocked at 6am daily.

Mr Masters also prices Coke products and two other dairy products below the general market price. For a dollar coin, customers can pick up four flavours of 250ml Calci-Yums and cans of Coke, Diet Coke, Coke Zero, Fanta and Sprite. He said the cheaper price points were a way of competing against supermarkets.

Milk prices have come under public scrutiny over the past year.

A Consumer New Zealand survey found 91 per cent of Kiwis felt milk prices were too high and 79 per cent thought the Government should hold an inquiry into milk prices. The Commerce Commission is expected to make a decision by the end of the month on whether an inquiry into milk prices was needed.

August will see a fall in the price of butter and cheese, but Fonterra claimed there was no reason to drop milk prices. In February, the dairy company froze wholesale liquid milk prices for the rest of the year - a move Fonterra claims has cost the company $4 million since its introduction.