Woolworths has explained the significant price difference for New Zealand-made butter between Australia and New Zealand, where Australian consumers are currently able to purchase the product at a lower price. In New Zealand, the price of butter has surged by 65% over the past year, further exacerbating the financial strain on households dealing with rising living costs. For instance, a 400-gram block of Westgold butter is priced at NZ$9.95 (approximately A$9.19) in New Zealand, while it retails for A$6.50 (NZ$7.00) at Woolworths in Australia.
Similarly, Mainland butter of 250 grams is available for A$6.50 (NZ$7.00) in Australia compared to NZ$8.90 (A$8.15) across the Tasman, highlighting a stark contrast in pricing.
Woolworths’ Position on Pricing Disparities
In a statement addressing the issue, Woolworths acknowledged the cost-of-living challenges faced by consumers in both Australia and New Zealand. The supermarket chain emphasised its commitment to delivering value. It attributed the differing prices to a complex combination of factors, including tax variations and market conditions.
Woolworths stated, "The pricing of local and imported New Zealand products sold in Australia is influenced by multiple elements, and separate buying arrangements exist in both countries." In particular, the chain pointed out that New Zealand is a leading global butter exporter; retail prices there have risen in line with increased global costs that took effect on 1 May. Conversely, Australian prices were established before this hike, reflecting a lower global pricing structure.
The statement also noted that differences in tax regimes and purchasing volumes, as well as promotional activities, can affect retail prices in each country. However, Woolworths did not confirm whether prices would rise in Australia as new stock from New Zealand becomes available.
Market Dynamics in New Zealand’s Supermarkets
The New Zealand supermarket landscape, much like that of Australia, is characterised by oligopoly, with a few dominant players controlling the market. Key brands include PAK’nSAVE, New World, and Four Square, which are owned by the local cooperative Foodstuffs. Meanwhile, Countdown and Woolworths are part of the Australian Woolworths Group.
Across New Zealand, prices for butter show little variation, with Mainland butter priced at NZ$9.95 at New World and NZ$8.49 at PAK’nSAVE, reflecting a tight market and limited competition.
Overall, while customers in Australia enjoy a temporary pricing advantage on New Zealand-made butter, the interplay of global markets, local economic conditions, and business operations continues to shape the pricing landscape on both sides of the Tasman. As inflation and living expenses remain pivotal issues for consumers, these differences in food pricing are likely to attract further scrutiny and highlight the complexities of supermarket pricing strategies in a globalised market.
