Cartoned milk price arouses criticism

Press, 22 October 1986, Page 27

Cartoned milk price arouses criticism

PA Wellington The price of cartoned milk may cancel any advantage alternative packaging has over bottles says the Milk Board. Grocers have been able to sell milk in cartons since October 1, but it is available only in Auckland and Invercargill so far. Milk producers have been reported wary of entering the market, and grocers pessimistic about the prospect of good sales, when the litre price — 89c — has been set higher than the bottled product. A bottle of milk costs 86c in Wellington, or 46c with an empty bottle. The National Association of Retail Grocers earlier also strongly criticised the price of cartoned milk, saying it was “fixed and exorbitant” and went against the Government’s free market policies.

The grocers’ association’s national secretary, Mr David Hayward, said members were disappointed with the “fixed and exorbitant” price set for cartoned milk. “The consumer is being asked to pay a premium for the follies of the old system, when every other aspect of Government policy is aimed at freeing up the economy and creating a competitive market price,” said Mr Hayward. The Milk Board, which set the price in conjunction with the Government, appeared to be hiding behind the antiquated regulations of the Milk Act. "Vested interests have apparently lobbied for the status quo without regard for the consumer who, as with every other daily commodity, wishes to decide how, when and where to buy milk in the most appropriate packag-

ing,” he said. But the chairman of the Milk Board, Mr Brian Kimpton, said today the fixed price required by the Government was set after the Commerce Commission fixed the shopdairy allowance or markup. “We see it very much as an interim price which will be revised'as soon as the initial introduction of the cartoned product is over, and we’ve had time to review the true costs involved in getting the product to the consumers. “We hope the price will be decreased, as it is likely some processors will be able to offer a lower price, based on their lower costs of production and processing,” he said. While the price compared favourably with that of other beverages in supermarkets, it was more expensive than

bottled milk at the gate, and it did not meet consumers’ expectations of cartoned milk being up to 5c cheaper a litre, not dearer than bottled milk. "A prerequisite for price review should be a reduction in the shop handling allowance for cartoned milk, given the greater convenience and reduced handling required in the sale of cartons.” Mr Kimpton said that at 89c a litre, cartoned milk might not meet the objectives of introducing alternative packaging, which were to increase total milk sales, and milk stations would be unlikely to recover their investment in new plant. The board was also concerned about the huge investment made by milk stations in alternative packaging equipment, he said.