I had some sympathy for the Commerce Commission this week when it avoided having to confront dairy giant Fonterra by wheeling out some mealy-mouthed mutterings about narrow limits onits milk inquiry.

The commission's Mark Berry and Sue Begg made their announcement with all the confidence of pharmaceutical manufacturers trying to convince the public that thalidomide wasn't all that bad, really.

The commission reminded us that Fonterra is not technically a monopoly. It might have gone on to add that this is not for want of trying. The commission ruled out price controls, but we already have those - Fonterra controls the price.

If the commission can't see what's wrong with the price of milk perhaps a simple illustration will make it clearer to them. In the profligate, wasteful United States, often accused of being so addicted to oil it goes to war for it, milk costs less than petrol. In New Zealand, a litre of milk costs about $2.50. A litre of petrol costs about $2.10.


Fonterra's annual turnover is $16 billion, more than the GDP of Afghanistan, Iceland or Jamaica.

In fairness, perhaps milk costs more than gas because of how each is made. Petrol begins as oil, which is formed underground over millions of years from pressure on fossils, most of it on the other side of the earth from us. It then must be extracted using heavy machinery, such as giant drills on land or huge floating oil rigs at sea. The process is dangerous and the casualty rate for employees is high. The oil is then sent by pipelines to refineries, where it is put through several complex processes before being shipped around the world and stored ready-to-be delivered to petrol stations.

Milk comes from a cow down the road.

The week before the commission delivered its non-finding, there was much beating of the national breast when we learned that 40,000 children go to school without breakfast every day. Subsequently the charity KidsCan announced pilot programmes to re-introduce the once-standard practice of free milk for children in 11 schools around the country. This will need to be funded.

But Fonterra is a step ahead. Its Kickstart Breakfast Club programme - in conjunction with Weetbix - provides breakfasts twice a week in 433 decile one to four schools. I don't know how much that costs them, but I'm pretty sure it's a lot less than the GDP of Jamaica.

Which sounds like a great thing for them to be doing, until you realise that if milk cost less than some other common items - petrol, for instance - they wouldn't need to do it at all.


John Key and Phil Goff argue that they are the only party leaders who need to appear on TV election debates because they are the only two potential prime ministers.


In fact, that's the one debate we don't need because Key will be Prime Minister at Christmas, like it or not. You can understand both men's reluctance to be seen in some strange company. Who in their right mind would want to spend time in the same room as vain opportunists who exploit racism to win votes, such as Don Brash (anti-Maori), Winston Peters (anti-Asian), Hone Harawira (anti-Pakeha). Throw in the verbal valium that is Peter Dunne at full throttle and you have the sort of TV they show at prime time in Hell.

But the TV debates aren't about what the two main party leaders would prefer - they are about democracy, which involves giving different voices a hearing.

Goff lost a great opportunity to call Key's bluff by refusing to go along with his imperious decree. Key could hardly debate himself. Only Sharples, with his gift for finishing a sentence saying the opposite of what he set out to say, could do that.

But had Goff stood firm he would have got to pocket the dignity card, Key would have been left looking arrogant and autocratic, and the rest of us could see what ineffectual, desperate performers the minor party leaders are shaping up to be.