Milk Board denies carton ‘rip-off’ claim

Press, 10 November 1986, Page 2

Milk Board denies carton ‘rip-off’ claim

PA Wellington The Milk Board has denied any “rip-off” in setting the price of cartoned milk, as claimed by the Wholesale Grocery Distributors’ Federation. The executive director of the federation, Mr Michael Dawson, has said the board was "rippingoff” consumers by artificially inflating the price of milk, and that there was no incentive for retailers to stock cartoned milk or for customers to buy it. “The federation appears to have double standards and self-interest when it claims it wants a greater mark-up for cartons — already 9.07 cents a litre — while at the same time saying the price is too high compared with the cost of bottled milk,” said the general manager of the Milk Board, Mr Hamish Turnbull.

“Perhaps he is suggesting that bottled milk subsidise cartoned milk sales? What effect would that have on the home delivery service?” he

said. It was inevitable that cartoned milk was more expensive, as each carton which was used once cost 10.5 c whereas a glass bottle cost about 35c and was used up to 100 times, Mr Turnbull said.

The new machinery required to pack milk in cartons was expensive and had to be depreciated over smaller volumes, he said.

“Vendors get a lower allowance for delivering milk in cartons to shops and supermarkets but they have to provide refrigerated or insulated vehicles and extra costs are involved,” he said.

Unless distribution costs and shop mark-ups were lowered cartons would inevitably cost more. “Mr Dawson quotes prices in unnamed overseas countries to justify his claims but in the only comparable countries, Australia and Great Britain, which both have bottles and cartons, cartons are more expensive,” said Mr Turnbull.