Willis says Fonterra boss should explain butter prices to Kiwis

Wednesday, 23 July 2025

Finance Minister Nicola Willis says she’s encouraged Fonterra boss Miles Hurrell to explain to New Zealanders how butter is priced ‒ and says he’s indicated he will.

A Fonterra spokesperson confirmed to The Post that Hurrell would respond to media questions on butter soon, likely Thursday. The company was working through responses to questions posed by Willis on Tuesday.

Willis has acknowledged there had been a “high degree of excitement” about her meeting with Hurrell at Parliament last night, after she earlier told reporters she would be seeking to understand why butter was so pricey.

She had emerged from that meeting believing that “all roads lead back to supermarket competition”, she said on Wednesday afternoon.

Characterising it as a “constructive, engaging” meeting, Willis said Hurrell was “very candid” and “so good at communicating about this that I’ve encouraged him that he should provide that information directly to New Zealanders, and I’ve been assured that that is something that he will be doing later this week”.

Willis said Hurrell had briefed her that butter, once an “unfashionable product”, was in huge demand globally. She said if prices were to drop on the global market, New Zealanders would see that too.

She and Hurrell had discussed that supermarkets “make choices” about what margin they charged and that Fonterra and retailers shared “a very small portion” of the overall price ‒ about 5-10% depending on various agreements.

“Which is a road that leads me back to the argument that I have been making, which is that the best thing that the Government can control, because we cannot control global commodity prices, is to ensure that we do what we can to increase supermarket and retail competition in New Zealand, which can have the effect at the margin of more downward pressure on prices.”

Federated Farmers dairy chairperson Karl Dean supported Willis’ questions to the Fonterra boss and said butter prices could be down to GST and supermarket decisions.

“Overseas supermarkets selling at less than NZ prices may be doing so because GST is lower in those countries. Supermarkets also make their own decisions on what to sell as loss leaders,” Dean told The Post.

He said export prices were at an “all-time high” as global dairy production was weak throughout Europe, Asia and North America.

“Until global production ramps up to meet that demand, New Zealand farmers – and NZ export returns – are benefiting.”

Dean said export prices continued to drive the cost of dairy.

“People who want to use butter on their toast or to bake a cake will be sick of hearing that, but that doesn’t change that direct correlation.”

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According to Stats NZ June data, the price of a 500g block of butter was up 46.5% to $8.60 in the last year, which was 120% higher than a decade ago.

Last week’s global dairy trade auction resulted in a small bump in global dairy prices, up 1.1% in the last month up to US$4380 per metric tonne (MT), after a 4.1% drop in dairy prices last month.

The price of butter remained unchanged, however, US$7500/MT, the highest priced commodity of the seven included in the auction.

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Before the meeting, Willis, a former Fonterra nutrient management general manager, said defended the co-operative, saying it was very transparent about what it paid for a bucket of milk, but “what is less clear to all of us is how that then translates into the price of a block of butter, and what the components of that are.

“We’re talking about the margin [of] 10 or 20c. But 10 or 20c really matters when you’re a Kiwi family at the supermarket checkout.”