Fonterra holds line on domestic milk prices

Fonterra holds line on domestic milk prices

FBNZ had already absorbed around $10 million of increased costs and with this commitment any further increases during the year will also be absorbed.

Fonterra announced that its Fonterra Brands New Zealand (FBNZ) business will freeze wholesale domestic milk prices for the rest of 2011.

CEO Andrew Ferrier said that international milk prices had risen steadily over recent months. FBNZ had already absorbed around $10 million of increased costs and with this commitment any further increases during the year will also be absorbed.

“We have seen world dairy prices go up by more than 26 per cent in the last six globalDairyTrade events. While these increases have had a big impact on raw material costs for FBNZ, we have only passed on an average increase of 1.4 per cent to our retail customers who ultimately set the price paid by New Zealanders.

“Looking forward global food prices are expected to remain strong. This is not just an issue for dairy or just an issue for New Zealand. There has been a fundamental change in supply and demand for food internationally which has pushed prices to their current levels.

“While these prices are good for food exports and the New Zealand economy, New Zealanders are feeling the effects of this in their shopping trolley.

”We recognize milk is an important part of the diet in New Zealand and we want to ensure that future generations of New Zealanders grow up enjoying it every day. It would be great to see retailers getting in behind this commitment for the benefit of New Zealand consumers.

Fonterra Brands New Zealand Managing Director Peter McClure said: “Global price increases will continue to impact the price that dairy manufacturers like ourselves pay, however, we want milk to remain an everyday part of the Kiwi diet so we’ve made a commitment to absorb any extra costs for the rest of the year. “

Mr McClure said that although prices were high, drinking milk on a daily basis had real nutritional benefits and milk was still good value for money when it comes to getting your daily nutrition intake.

“Just 50 cents will buy you a breakfast of two Weet-Bix and milk.

“Through our KickStart Breakfast program, partnering with Sanitarium, we are seeing the real benefits a nutritious breakfast provides school children. Since the program started two years ago we have provided more than 1.5 million free breakfasts which is not only giving children a nutritious start to the day, but is also having a positive impact on their performance at school.

“A glass of milk will give a child around a third of their daily protein and calcium intake and up to two thirds of some vitamin requirements which is more nutrition for a much lower price than most fruit, vegetables and meat,” he said.

About Fonterra

Fonterra is a global leader in dairy nutrition—the preferred supplier of dairy ingredients to many of the world’s leading food companies. Fonterra is also a market leader with our own consumer dairy brands in Australia/New Zealand, Asia/Africa, Middle East and Latin America.
The farmer-owned New Zealand co-operative is the largest processor of milk in the world, producing more than two million tons of dairy ingredients, value added dairy ingredients, specialty ingredients and consumer products every year. Drawing on generations of dairy expertise, Fonterra is one of the largest investors in dairy based research and innovation in the world. Our 16,000 staff work across the dairy spectrum from advising farmers on sustainable farming and milk production, to ensuring we live up to exacting quality standards and delivering every day on our customer promise in more than 100 markets around the world.

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