Should coke be cheaper than milk?

By Amanda Johnson 12/04/2011

’When coke is cheaper than milk it is a national disgrace,’ said Darryl Evans, from the Mangere  Budgeting Services Trust, on Campbell Live last week.

The Campbell Live feature looked at the thorny issue of the affordability of healthy food in New Zealand. As well as John Campbell’s interview with Darrryl Evans, reporter Tristram Clayton talked to Timaru Mum Lisa Williams, who estimates her family grocery bill has tripled since she started eating more healthily. Just as an example, she estimates that it is costing $180 per week just to feed her family of five two portions of fruit and three portions of veggies each day. Healthy eating, in her view, is just not affordable.

Lisa says healthy food should be cheaper and more support should be given to those who need to lose weight. I agree! Let’s start to make the healthy option the easy (and affordable) option with pricing strategies that support people in making healthier choices when it comes to food. And more resources to help those struggling with their weight would be a great thing, for example funding for specialist weight management services to get people on track and to help deal with the behavioural issues around food that are such a challenge for so many people.

This whole issue isn’t new. The Science Media Centre last year reported on the SHOP (Supermarket Healthy Options Project) study, which found that price discounts on healthy food were the most effective way of encouraging people to buy healthier foods.

And food stress is a topic that also concerns dietitians, who had this issue high on the agenda at their national conference last year in Dunedin.

In fact we are all talking about this issue at the moment. Campbell Live isn’t the only media outlet to have covered the high price of healthy eating over the last week.

Media reports this week suggest dairy prices are set to rise again, following signals from manufacturer Goodman Fielder that rises of up to 12% are on the horizon. Despite the fact that in February this year, Fonterra Brands said it would absorb any milk price increases from its parent company for the rest of the year rather than pass them on to Kiwi shoppers, according to this article, a Goodman Fielder spokesman said that three days after announcing that price freeze, Fonterra increased the price it charges Goodman Fielder for wholesale milk from $7.30 a kilogram of milk solids to $7.90 a kilogram.

It seems that this lack of ability to afford healthy food is contributing to considerable mental stress for people in New Zealand. Last week, new research was released from the University of Otago, drawing upon the Survey of Families, Income and Employment, which included 19,000 adults over 2004/05, as well as socioeconomic and health data from Statistics New Zealand.

Researcher Kristie Carter (a research fellow from the University of Otago) and her colleagues found food insecurity not only had an impact on nutrition and physical health, but also on the mental health of New Zealanders.

“What we found is that people who are food insecure report higher levels of psychological distress, compared to those who have enough food to eat,” she said.

In New Zealand, we produce an abundance of good quality healthy food — milk, meat, fruits and vegetables – and yet for many on a low income the only affordable food is the junk — high sugar foods, deep fried take-aways, and drinks that provide nothing but empty calories in the form of sugar.

Surely it’s about time that we started to look at pricing strategies that make the healthier options cheaper.

It’s time to start looking at the cost of food, and to ensure healthy food is affordable to all New Zealanders and particularly to children, whose nutrients needs are high.

0 Responses to “Should coke be cheaper than milk?”

  • If you think milk should be cheaper than coke you have absolutely no clue about production costs for food, and should not be held up as anything close to an authority on budgeting or nutrition.

  • Did you read beyond the first line of this blog? I think you have entirely missed the point of the piece – which is that we should be looking at ways to alter the pricing of healthy and unhealthy foods to help people afford the healthier choices. As I have discussed before, there are a whole range of measures that could be implemented to make food more affordable including subsidising food costs for those on a low income, provision of free or subsidised meals (and/or milk) in schools, and removal of GST on healthy foods such as fruit and veggies. This blog is not about the production costs of food!

  • great post Amanda.
    I suspect that those on good salaries such as politicians often assume that healthy food costs no more than unhealthy food, so it is good to have the difference highlighted.
    Do you know if there is any guide to what time of year different vegetables are the cheapest? Perhaps if people knew when certain vegetables are cheapest, that would help a little?
    I love what some schools are doing with school gardens which helps student appreciate fresh food more – nothing like growing it oneself.
    Personally I think at least having free milk in schools would be a good start.

    Not sure what’s up with balthazar? Certainly looks like he didn’t understand your post at all!

  • Personally I think at least having free milk in schools would be a good start.
    Yes, but not like it was when I was in school – warm & bleuch after standing out in the sun after it was dropped off! That would put kids off the stuff well & truly!!
    & yes, great post, Amanda. I do wish the politicians would look seriously at this one instead of putting it in the too-hard basket.
    Balthazar – surely you don’t think that it’s OK for only the well-off to be able to afford healthy foods for themselves & their families?

  • If you didn’t catch Campbell Live tonight, check it out on the TV3 website, fascinating interview with a wriggling Andrew Ferrier, Fonterra CEO. But he did reveal the breakdown of who gets what share of the price of a bottle of milk.

    $4.80 2 Litre bottle of milk.

    According to Ferrier the breakdown is…

    65c per litre to farmers (so $1.30 for a 2L bottle)
    12 per cent margin to Fonterra (58c)
    15 per cent GST (72c)
    The rest is divided between the retail milk brand eg: Anchor and Meadow Fresh and the retailer eg Progressive or Foodstuffs.

    So around $2.20 is split between the retail milk brand and the retailer.

    Fonterra recently told the Waikato Times it makes just 2c per litre profit from the milk it collects

    Of course, Fonterra owns Anchor so pockets profit through its retail brands as well. As for Progressive and Foodstuffs, seems like a decent little earner in milk!

  • When coke is cheaper than milk it is a national disgrace

    Nope. It is no disgrace at all. The (free) market itself decides the price, unless we want to regulate everything in the market place whenever there is someone whinges about the affordability to buy things. They tried command economy (govt interference for setting prices) in the Soviet Union and it failed.

    The supermarkets & food producers don’t owe anyone. It is the private property of its shareholders.

    Peter Griffin said…
    Of course, Fonterra owns Anchor so pockets profit …

    And what is wrong with profit making sir? Businesses are there to make a profit. They’re not there simply to be Santa Claus to the population. They don’t come with a gun and force me to go & buy from them.

    From the other thread on “vaccination-fear-mongering”, some commentators there have the same hatred. They say that Pharma companies are driven by profits. That’s how a business is supposed to be run. They need to thrive or go under.

  • Yes the Campbell Live piece last night was very interesting! And if GST was removed from the price of milk (other countries exempt basic foods from tax) that would certainly make milk more affordable (72c cheaper).

    I agree with Alison that if we did go down the route of providing milk in schools it would need to be nice and cold – surely we have the technology to do that in this day and age? I also have memories of the luke-warm not-so-appetising milk we were served up at primary school back in the UK!

    In terms of buying fruit and veg in season – yes that’s the way to go and I often advise people on a budget to go for the seasonal varieties as well as shopping in local markets and looking for special offers in the shops. Here is a nice little guide to buying in season:

    And Falafulu Fisi – no one is suggesting there is anything wrong with companies making a profit. The concern here is making sure the most vulnerable in our society can afford a healthy and nutritious diet – one of the most basic of human needs and one that we should be able to meet, in a country such as New Zealand, for the whole population.

  • @Falafulu Fisi

    “And what is wrong with profit making sir?”

    Nothing. I was merely pointing out that Fonterra’s cut on a bottle of milk is obviously more than 12 per cent when it comes to Anchor, because Fonterra owns Anchor, which accounts for around 50 per cent of the retail market for milk. Seems like something worth keeping in mind. But it seems to have hit some hot button with you related to free market economics and market liberalisation. Don’t worry, I agree with you, greed is indeed good!

  • While the above article raises some very worthy issues, I think the discussion needs to begin with what actually constitutes healthy food/nutrition. While it’s obvious on one level what counts as “bad food”, e.g. coke, cake, etc, it’s not very well known that white bread is basically as bad (though even all of these things can all fit into a healthy diet in the right balance with other foods).

    Some foods that are far worse for our health (in more than minimal quantities) than commonly known:
    Cereal, bread, fruit, dairy products, fruit juice.

    Some foods that are far better than commonly known, even in large quantities in some cases:
    Eggs, legumes, fatty meats, olive oil.

    Dairy in particular is something that seems to be getting far too much good media, yet it is best for most people to stick to very limited quantities of dairy products and in as unprocessed a form as possible, e.g. choosing full cream for coffee and staying clear from unprocessed cheeses.

    This issue is particularly important for people who are grossly overweight. I was one of those people and lost about 40kg almost solely from eating better.

    For suggested reading (and more extensive references), check out Dr. Phil Maffetone. He is a highly respected practitioner of complementary sports medicine (which might not agree with everyone but there is no question that his ideas on nutrition have a good basis and are scientifically verified through peer reviewed research). He’s also a musician which is quite cool. One of the genuinely creative people of our era.

    Once we have some clear consensus on what is “good food”, or rather how to eat well (since it’s more about a good nutritional plan than about individual foods), then we can look at helping people get the right foods on their plates and in their lunch boxes.

  • Lisa said…
    Lisa says healthy food should be cheaper and more support should be given to those who need to lose weight.

    My question to Lisa & others who agree with her. Who is going to support people like her with her life-style eating problems? Oh, did you say subsidize? Taxpayers to subsidize people’s irresponsible eating habits? Why should taxpayer dollars be paying for people who don’t look after themselves? I don’t want to be taxed more just to pay for non-core government role like subsidizing healthy eating. For those who feel strongly about Lisa’s situation and want to help her can do so voluntarily out of their own pockets and not to look to taxpayers for that. Roger Kerr has suggested something similar.

    Roger suggested
    Whenever I see people saying they would be happy to pay more tax, I think they should be able to go ahead and do so voluntarily. In fact I would go one step further and allow voluntary payers to indicate the broad area to which they want their money applied, eg police, welfare.

    It would be fascinating to see how much additional revenue IRD would receive. I suspect not a lot.

    First, my guess is that if people want to donate money for welfare purposes, most would give it to private charitable organisations in the belief that they are often more effective than the government in such roles.

    Second, I suspect that many people who tell pollsters that they favour raising taxes want them raised on other people, not themselves.

    Anyway, if the law was changed to allow voluntary payments to IRD in excess of tax assessments we would soon find out how many people (like the Herald’s editorial writer) put their money where their mouth is. The IRD could report aggregate payments in the same way that it reports other tax revenue. What could be the objection to such a law change?


    Anyway, I have a few relatives including my older sister who have the same weight as Lisa. My older sister is 122 kg now and I told her at the beginning of the year to do exercises & to stop eating yams & taro (popular with us islanders) and she has. She told me recently she’s gone down from 127 kg about 3 months ago to 122 kg today. She understands that if she wants to help herself become healthy, then its only her who can solve it and not the government.

  • Falafusu Fisi

    “Who is going to support people like her with her life-style eating problems? Oh, did you say subsidize? Taxpayers to subsidize people’s irresponsible eating habits?”

    Actually I think the whole point of the article is that the government should be encouraging people to develop responsible healthy eating habits and subsidies would help.

    I don’t remember there being anything in the article about taxpayers subsidizing irresponsible eating habits?
    The suggestion was to subsidize milk not coke.