Santa's present for the primary sector - an FTA with India
Primary sector leaders have welcomed the announcement of a Free Trade Agreement between India and New Zealand.
The American butter has been bought in bulk by Synlait's subsidiary Dairyworks and packaged in Christchurch under the "Burtfields & Co" brand. It is retailed through Foodstuffs' Pak'n'Save supermarkets, initially in the North Island and now in the South.
500g blocks were initially selling at $6.99, with the next cheapest butter reportedly being Pams at $7.19.
DCANZ executive director Kimberly Crewther said that DCANZ supports free trade, so consumers globally should have the choice of New Zealand dairy products, and New Zealanders should also have the choice of products produced elsewhere.
It reflected New Zealand's low import tariffs, and supply and demand dynamics globally.
Crewther said New Zealand was recognised as a producer of very high-quality dairy products, and our butter was valued globally for its premium qualities.
"New Zealand butter sells at a premium to US butter in global markets," she told Dairy News.
"Given this is the case, and that there has been a desire voiced for cheaper butter options in the New Zealand retail market, the importation of US butter into New Zealand appears to be a case of markets working as they should.
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"New Zealand farmers will continue to earn a market return that reflects the quality and premium value of their products, and New Zealand consumers will benefit from choice."
As Synlait's consumer brands subsidiary, Dairyworks markets its own New Zealand-made butter, cheese and milk, under the Dairyworks, Alpine and Rolling Meadow brands.
Dairyworks general manager sales, Mark Simpson, said they had an opportunity to bring butter in from the US at a lower price, at a time when butter consumption was under pressure with people buying less butter, just based on the shelf price.
"So, we looked at what our options were to help in that space."
Simpson did not reveal details of the American source, nor how much they had brought in, but it would be "a couple of months' worth" depending on consumer uptake.
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Dairyworks markets its own New Zealand-made butter, cheese and milk, under the Dairyworks, Alpine and Rolling Meadow brands. |
Final retail pricing was up to Foodstuffs rather than Dairyworks, said Simpson.
Speaking when the butter had been available in the North Island for about a week and had yet to go on the shelf in the South, he said it was selling well but competing with several other brands.
"So, it really depends on how consumers respond over a more sustained period of time."
Simpson said it was "very much" just a trial.
"If there is good consumer uptake, if consumers go 'Actually, butter that's slightly lower cost on shelf is something I'm wanting to come back and buy more of', then we'll look at it again, but it needs to make commercial sense.
"Getting butter from the US to New Zealand it works at certain times given the way global markets work, but it won't work all the time."
Simpson acknowledged social media criticism of the American product, chiefly that it is too pale, due to American cows being primarily grain fed, in contrast to New Zealand butter's yellow colour from the beta-carotene content of a grass diet.
But Simpson said they were getting feedback "all across the spectrum" and the taste was very similar to New Zealand butter.
