The cost of butter has nearly doubled in just over a year, now retailing at $8.60 for 500g, compared with $4.49 in April 2024. While the price increase reflects global market forces, it has added pressure on household budgets and prompted political debate.
ConsumerNZ data shows that food prices are a top concern for New Zealanders, and trust in the government’s ability to manage them remains low.
Seymour Defends Farmgate Upside in High Butter Prices
Deputy Prime Minister David Seymour has pushed back on criticism, arguing that high butter prices reflect global trends and benefit local producers.
“There are two ways you can look at this. One is to criticise the fact that, you know, prices are high, they’re set overseas, and they benefit New Zealand farmers,” Seymour said in a media interview.
“Or we can ask ourselves, how do we ensure that NZ has a growing economy, a high-wage economy, so that when prices spike like this it doesn’t have a big impact on families.”
Seymour also suggested that low petrol prices were helping balance household budgets, contrasting current dairy inflation with past periods of high fuel costs.
ConsumerNZ Challenges Economic Framing Amid Cost-of-Living Pressures
ConsumerNZ has challenged Seymour’s framing of the issue, stating that broader affordability concerns are being overlooked.
“Of course, we should be focused on growing a high-wage economy to roll with global price spikes—but when this is contrasted with an increasing number of people who are struggling to pay for the basics, we question at what cost?” said a spokesperson.
“Most New Zealanders don’t believe the Government is doing enough to keep food affordable—two-thirds of people said they have low confidence in current Government policies.”
Finance Minister Meets Fonterra to Assess Pricing Structures
Finance Minister Nicola Willis met privately this week with Fonterra CEO Miles Hurrell to discuss the high butter costs. She said the discussion confirmed that supermarkets—not Fonterra—set retail prices.
“I will be asking about their retail pricing model, how they’re seeing the supermarkets’ margins, how they’re seeing their own margins,” Willis said.
“The meeting would not solely be about butter.”
“Miles was candid that different retailers make different choices about the prices they charge and how much margin they have on the product.” Willis added.
Supermarket Competition Identified as Key to Cost Relief
“The best thing that the government can control… is to ensure we do what we can to increase supermarket and retail competition in New Zealand,” she said. She noted that Fonterra operates in more competitive overseas markets, where pricing “feels different”.
Political Calls for Retail Sector Reform Intensify
Debate over food pricing continues to intensify as Chlöe Swarbrick of the Greens called out inaction on supermarket competition. “There’s been a lot of words on it, but not a heck of a lot of action.”
Labour has also challenged Nicola Willis on her previous industry experience, though she dismissed the criticism. A response from Fonterra is expected shortly, with major retailers approached for comment.