World market price is usually a con

ASHLEY BALLS RECEIVES A SOCIAL MEDIA POST WHICH TRIGGERS A COST COMPARISON ON DAIRY PRODUCTS BETWEEN SPAIN AND NEW ZEALAND. GUESS WHO’S WORSE OFF?

THANKS TO social media I (and a lot of others no doubt) received a post this week – together with a photograph of a pack of butter complete with a legible supermarket price tag.

The price for 500 grams was NZ$9.91.

This is a totally ridiculous price and completely insupportable from any standpoint; the farmers, the co-op (yes, it was one of ‘ their’ brands) the producers, and the supermarket chain – one of New Zealand’s big two.

As I live in central Spain in a city of 150,000 this caused me to do an instant comparison.

At the current rate of exchange (NZ$1 = €0.58) the direct price comparison is €5.74 and our local supermarket (Gadis) retails a 500gram pack of Asturiana traditional for €3.99.

It begs the question why butter in New Zealand is 40 percent more expensive than in Spain. There is a GST/IVA component to consider as Spain, like the rest of the EU, has multi-rate GST. Butter is not an essential, unlike olive oil, and attracts a ten percent rate.

Butter in Spain is a luxury food item and is still more than 30 percent cheaper than New Zealand.

Spain is big dairy producer and on a per capita basis a bigger consumer of milk than New Zealand. The northern provinces of Gallicia, Asturia, Cantabria and Biscay are all big producers and the main source of domestic milk and cow-based dairy products.

The central and southern provinces are all big producers of cheese but mostly made from sheep or goats milk. I will get to their prices later.

There is very little difference in regional prices for fresh milk products in Spain – being further from the supplier is not considered a valid excuse for significant retail price variations. This may be because Spain is a large country and the main markets for cow-based dairy products are all many hundreds of kilometers from the source. Fresh milk is widely available, though Spaniards are brought up on and prefer the sterilized version.

However, when the price of fresh milk and butter here is two thirds of New Zealand’s something is fundamentally wrong. The excuse that the New Zealand public is paying world market price is simply not true. Given that for every 20 litres of New Zealand production, 19 are exported, it doesn’t matter anyway. For a five percent increase in export prices, milk in New Zealand could be given away! Somebody is on the make and given farm-gate prices it can only be the cooperative and/or the retailers.

As for cheese, I despair. Spaniards eat some cows-milk cheese but the real quality products are made from sheep and goats milk. There is industrial scale production but a great deal of artisan cheese too – at extraordinary prices. In our local market and supermarket it is almost impossible to buy a domestic artisan cheese for more than €20 a kilo though I personally have a taste for a specialist goat cheese that sells for €9.95 per 400gram pack. It comes in a wooden box and carries a label with date and place of manufacture, specific herd and cheesemaker’s name.

Try finding artisan cheese anywhere in New Zealand for NZ$34.50 a kilo. On my last trip back (January/February 2017) $120 a kilo was ‘normal’ in Auckland.

My son, who has a food business in Auckland, tells me I should never make price comparisons as they ‘are what they are’. This is something I dispute as we live in a world crammed with sophisticated international logistics capacity and the days, which I remember, of simply not being able to buy ‘foreign stuff’ in New Zealand are long since gone.

What we have now is much wider access to foodstuffs from all over the world and whether you live in Wellington, London or Brussels you can get pretty much anything. But New Zealand is a stand-out location when it comes to prices, whether it is fresh milk or something more exotic.

I have heard all the stories before about how far New Zealand is from its markets/suppliers and that the costs of importing are prohibitive and bureaucratic. But it’s not true and as for bureaucracy it is benign in New Zealand compared to here.

It’s not just foodstuffs either. I am sitting here looking at a brochure of an apartment in a new build block of four, close to a park on the outskirts of the city, in walking distance from the university.

A three bedroom, three bathroom, centrally-heated, double-glazed, brick-built place of 150 square metres has an asking price of €172K (NZ$295K).

I am writing this 24 hours before leaving on a road trip to the UK and will be staying overnight in two locations – one in Spain, the other in France. The price for a four-star Accor hotel in a French city is €146 for two people for dinner, bed and breakfast in a premium room. Currently (in the first two weeks of December) a four-star hotel in the centre of Madrid is some €70 to €90 for a double room.

What’s happening?