Woolworths Continues Selling New Zealand Butter Cheaper in Australia
Woolworths has clarified why it offers certain New Zealand-made dairy products at lower prices in Australia compared to those sold across the Tasman. Recent data indicated a significant rise in dairy prices in New Zealand, specifically butter, which has surged by an astonishing 65 per cent over the past year, adding to the mounting cost-of-living pressures faced by consumers.
Currently, a 400-gram block of Westgold butter is available for A$6.50 in Woolworths’ Australian stores, whereas the same product retails for NZ$9.95 (approximately A$9.19) in New Zealand. The discrepancy is noted with Mainland butter as well, with a 250-gram block priced at A$6.50 in Australia and NZ$8.90 (about A$8.15) in its home market.
Reasons Behind Price Differences
Woolworths acknowledged the challenge of cost-of-living pressures for customers in both Australia and New Zealand, asserting that their priority remains “delivering value wherever we can.” The company explained that Trans-Tasman pricing is influenced by various factors, including tax conditions and global market fluctuations.
In its statement to Yahoo News, Woolworths indicated that multiple variables impact the pricing of New Zealand-produced items sold in Australia. Notably, New Zealand’s position as the largest global exporter of butter means that recent price hikes in the country reflect changes in global prices enforced on May 1. In contrast, the Australian prices are anchored to products sourced prior to this date, which were less affected by the recent increases.
Other contributing factors to the price variances include differing tax regulations and the volume of purchases, along with distinct promotional pricing strategies in each region. However, Woolworths couldn’t confirm if prices would rise in Australia for products sourced from New Zealand in the future.
New Zealand’s Pricing and Market Dynamics
Despite the appearance of competition in New Zealand’s supermarket landscape, similar to Australia, it is primarily dominated by a duopoly. Supermarkets such as PAK’nSAVE, New World, and Four Square are controlled by the local cooperative Foodstuffs, while Countdown and Woolworths operate under Australia’s Woolworths Group.
Confirming the market dominance, prices for butter in New Zealand are notably similar across supermarkets, with Mainland butter priced at NZ$9.95 at New World and NZ$8.49 at PAK’nSAVE.
In summary, Woolworths’ pricing strategy reflects a complex interplay of sourcing, tax arrangements, and market demand, ultimately resulting in lower butter prices for Australian shoppers as compared to their New Zealand counterparts. As both nations grapple with rising living costs, the implications of these price differences continue to spark debate among consumers.
