Butter is expensive because supermarkets – the two main sellers of butter to eN-Zed consumers simply can chat with each other and keep the price high.
It’s not really about Fonterra. They sell to the supermarkets. We buy from the supermarkets, not from Fonterra. Even if Fonterra put its wholesale price down, the supermarkets would still have to put their prices down – and why would they? There’s no incentive at all for either of the supermarket operators to sell butter cheaply. The same applies to almost everything they sell – almost.
There are other sources for consumers to buy fruit and vegetables (direct from farmers or through farmers’ markets) or growing their own. We can buy biscuits and cake and chocolate from other retailers too. But butter (and cheese and many other staples) can only be bought from supermarkets.
Bringing in another big supermarket operator would change our duopoly to an oligopoly – and the problem would simply mean three sellers colluding (allegedly) rather than two. We don’t need another supermarket operator; we need 5 more or 10 more. And firms will only enter the market if they can make above normal profits, which they can’t, so they won’t.
Here’s a few ideas:
Don’t eat butter. Mr Fonterra said butter used to be the bogeyman, a bad-health product, but now butter has been shown to be a health food and so global demand has soared. I’m pressing the BS button on that – butter is NOT a health food. Butter is fat, fat ain’t a health food. Don’t get your health advice from Instagram or from the person who profits from selling the product. (In the old days, they said cigarettes were healthy too.) Butter is fat, fat’s a killer. Fat makes you fat and fat people have heart attacks and strokes. Don’t eat butter.
Pop along to a local dairy farmer and ask to buy some cream. They’ve probably signed a contract saying they’ll not do this, but… um…, you know. Make your own butter. Don’t worry, it’s simple. But you’ll only do it once and then you’ll realise that $10 for a pound of butter isn’t such a bad price after all.
Make a lot of your own butter and sell it at a weekly farmer’s market. Of course, it won’t take you long to realise that you too can make a big fat profit, because all you have to do is sell it for about 30 cents cheaper than your local supermarket. It’s greed, but greed (and laziness) is what made the human species the dominant beast on Planet Earth.
Cut out your spending on other things so that you can spend money on butter. If you smoke cigarettes or vape, shut up about the price of butter. If you’re buying fashion clothes, shut up about the price of butter. If you’re buying multivitamins or antioxidants or other pseudo-health products, stop wasting money and shut up about the price of butter.
But the best advice, if you don’t like the price that the supermarket is offering butter at, don’t buy it.
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