Photo: RNZ / screenshots
Finance Minister Nicola Willis' staff urgently pressed officials for international dairy price comparisons in the hours before her meeting with Fonterra's chief executive, newly released documents reveal.
The emails, obtained by RNZ under the Official Information Act, show a last-minute scramble for hard data as pressure mounted on the government to respond to soaring butter prices.
On the afternoon of 21 July, the day before Willis was due to sit down with Fonterra's Miles Hurrell, the minister's private secretary John Creech asked the Ministry of Business, Innovation and Employment (MBIE) for "some facts and figures... so that the Minister has solid info".
He specifically requested a quick price comparison between New Zealand and Australia, noting: "It would be good to have quantitative info if possible, and a clear understanding of whether there's more to it than exchange rates and GST."
By the following morning, the request had become urgent.
"Looks like the minister will need something in hand about this by the time she goes to Caucus this morning (10am)," Creech wrote. "Can you please get me whatever you can in an hour (by 9.40am)?"
MBIE officials rushed to pull together tables comparing dairy prices across New Zealand, Australia and the UK.
Fonterra chief executive Miles Hurrell. Photo: RNZ/Marika Khabazi
The figures suggested that Mainland butter was priced similarly on both sides of the Tasman once GST was excluded, but milk cost nearly $2 a litre in New Zealand, compared with about $1.64 in Australia.
"We will keep working on this before the meeting, but this is the best we have managed to get together in the short timeframes," MBIE senior policy adviser Andrew Palmer told the Beehive.
Creech responded with thanks but asked for the comparison to focus on Fonterra products. At midday, he followed up: "When are you anticipating having a next version? There's a lot of interest in this in the building today, so another iteration soon would be appreciated."
Palmer sent through an updated version after 1pm but cautioned it had not been robustly verified: "I am going to send it to someone else to triple check our numbers. I'll let you know of any egregious error."
He added that the work was "quite quick and dirty" and "not the most scientific of comparisons".
"Our feel... is that milk is more expensive in NZ," Palmer told the Beehive. "Other products are more comparably priced, particularly when you look at the NZ price excluding GST. Cheese is hard to gauge, as what might be labelled 'Tasty' here, may be a different spec to 'Tasty' overseas."
As the time of the meeting bore down, Creech also asked for further details on Fonterra's market share in New Zealand and Australia.
Palmer warned the answer was "quite a hard one to calculate" and would need input from the Commerce Commission: "I am not sure we will get there in time. I haven't been able to get the right people at ComCom [Commerce Commission]."
At 5:15pm - 45 minutes before the meeting - Creech replied: "Totally understand they're hard numbers to get, so we won't quantify. Basically need stuff in the next few minutes, so don't worry about it. Thanks for trying though".
Speaking to reporters the next day, Willis called the discussion "constructive and engaging". She said she did not believe New Zealanders were being ripped off and stressed that boosting supermarket competition remained the government's main lever to bring down costs.
Pressure is mounting on the government to respond to soaring butter prices. Photo: RNZ / Unsplash
'Why are dairy prices in New Zealand so high?'
Documents show Fonterra first approached Willis' office on 19 June to request a meeting to discuss its financial outlook and planned consumer divestment.
After a phone call on 10 July, Willis' staff confirmed a 30-minute slot. Four days later, they followed up with another email: "The Minister has asked me to advise you that she would like to discuss retail diary [sic] pricing in New Zealand."
Fonterra responded to say it had expected the topic given Willis' recent media comments, but said it was "useful to have that confirmed".
Ahead of the meeting, the company sent Willis its latest business update, noting that it included some commentary around high dairy prices.
MBIE briefing notes prepared for the minister suggested she raise several lines of questioning, including: "Why are dairy prices in New Zealand so high relative to other countries? What can you do to address these concerns?"
"What do you make of the Commerce Commission's concerns about difficulties smaller grocery retailers face in obtaining competitive supply from large suppliers like yourself?"
Officials also recommended she seek Fonterra's views on OECD data showing that, in 2023, New Zealand prices in the "eggs, milk and cheese" category were roughly 30 percent higher than the OECD average.
The briefing canvassed Fonterra's proposed sale of its consumer arm - confirmed last week as a $3.8b deal with French dairy giant Lactalis.
MBIE cautioned: "It's unclear how this proposed divestment may impact competition in New Zealand. However, given Fonterra is likely to continue to hold a dominant position in raw milk supply, it seems unlikely that it would result in major improvements for consumers."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
