July 24, 2025 • 5 mins
Nicola Willis is defending her decision to seek answers from Fonterra about its prices.
The price of butter has almost doubled in the past 14 months because Asia is demanding more, and Europe is producing less.
Fonterra is ruling out selling butter to New Zealanders at a lower price than it makes overseas.
But Willis told Mike Hosking she has no regrets about raising the issue with the dairy co-op in the first place.
She says she can't dismiss an issue lots of New Zealanders are talking about.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
How about that week in butter Ray and is it
any cheaper? No, it is not. Have we learned some
lessons around pricing in international markets? Might have In the
midst of all of it was the Finance Minister, Nikola Willis,
who was with us. Good morning, Good morning, make Did
you overplay your hand?
Speaker 2 (00:14):
No, I didn't, I would I would say the media
got very excited. As you know, I've been talking about
supermarket margins and that context. I did confirm that the
next time I was speaking to Fonterra it wasn't issue.
I'd talked to them about. Obviously, they're a big food
supplier in New Zealand, so their perspectives on supermarket margins
and competition are of interest to me and I think
(00:35):
probably to most New Zealanders. And in the context of
butter it came up. I did talk to Miles Harrel,
the chief executive, about that, and ultimately I think it's
pretty useful that he has been talking with New Zealanders
about how much global demand there is for this beautiful product.
What did you say that that's bringing you into the world.
Speaker 1 (00:56):
Why did you stand that you looked on the tiles
this week as I watched you like you had an
oozy in your handbag and you're going to gun them down.
If there wasn't a good explanation, then you came out
went oh bugging me that it isn't international markets.
Speaker 2 (01:08):
No, not at all. I know, not at all. I
was very clear that commodity prices internationally are the major driver.
I've been saying that consistently for a long time. But
that also I was interested in how Fonterra in the
supermarkets divide the costs in the margin at the margin.
Speaker 1 (01:27):
But you know that they know that, you know how
they do it because you work for Fonterra.
Speaker 2 (01:31):
Well, I worked for Fonterra nine years ago. I never
was branded part of the business. In the branded part
of the business. Well, actually, competition should rightly be a
dynamic thing, and you would expect over a nine year
period that pricing behavior between different supermarkets and different suppliers
could change, and in the context of a very high
(01:51):
commodity price, I think it's a good question to say, well,
what does that mean for margin behavior? I think it
is interesting that what we've had revealed this week is
that supermarkets are choosing quite different margins on butter you've
had some say, actually we're taking a loss on it.
At the moment, it's pretty clear that with cost cos
prices it would appear loss on it. Well, well yes,
(02:14):
And wouldn't more of that happen if there was more competition?
Speaker 1 (02:18):
What they'd all lose money? Is that where we're heading forward,
see the would.
Speaker 2 (02:22):
Distinctive choices make about how they want to get customers
in the door. And what you can see in competitive
markets is that grocery chains do everything they can to
get customers in the door and get volume out the door,
and then they choose selective products, including staples like butter
or bread or milk, where they choose to take a
loss so people come in the door and buy their
(02:44):
other products. Who win's out of that loss.
Speaker 1 (02:46):
Here's my concern for this over all debate. We're wasting
our time. We've got more important fish to fry. And
I'm watching the news last night with yet another bunch
of myopic New Zealander sitting in malls around the country
going well, why don't we have a domestic price? And
we know why we can't have domestic price, but that's
all we bog ourselves down on this stuff, and it's
wasting our time, but is the price It is because
(03:07):
it's a success story and we're reaping the rewards for that,
and instead of celebrating it, we're having stupid meetings explaining nothing.
Speaker 2 (03:15):
Well, look, I do celebrate our successful dairy industry. I also,
as a representative, think that if New Zealanders are really
engaged in an issue, it's not enough to just say
to them, sorry, not an important issue, not going to
talk about it. I think it's good that we've now
had communication about here's how the global price works, here's
how's most of the price is formed, Here's what happens
(03:38):
in terms of competition, here's what you can expect in
terms of the price in future. And politicians do have
a choice. We can say, look, I'm not going to
talk about that, it's not important, but I am not
prepared to dismiss questions from New Zealanders in that way.
I think that they have got more information this week,
and look, I'm with you. A successful dairy industry creates
(03:58):
jobs and better income for Kiwi's. That is excellent. It's
also the reality, but it is expensive in supermarkets right now,
so people are more interested in commodity pricing and margin
pricing than they've ever been. And I don't think it's
a sin to talk about it.
Speaker 1 (04:13):
Super quick word if you would on Adrian or why
did you make it such a big deal? Guy's self important?
He packed a big sat at a couple of meetings,
one of which was with you, why didn't you say that?
Speaker 2 (04:25):
Well, all I have said is that.
Speaker 1 (04:27):
I know what you've said, but what you should have
said is the guy myself importantly stormed in my office,
yelled a bit at me, and then quickly had to
write a letter and then he quit.
Speaker 2 (04:36):
Well, my perspective on it has been he was employed
by the Reserve Bank. They undertook employment discussions with him,
he resigned. Not for me to get into the middle
of that employment relationship and start speculating and using have
gone on, Well, whether or not that was relevant to
(04:56):
his resignation, Well was the Reserve Bank. Well that's a
matter for the Reserve Bank and not a matter for
me to speculate on. Wherever I have been able to
be candid, I have been. But you've got to remember
there's two things I have to protect here. One independence
of the Reserve Bank and their role as an employer. Two,
I shouldn't be the one giving rise to potential legal
(05:17):
financial risk to the New Zealand taxpayer. As much as possible,
I think it's right for me to stay out of
it all.
Speaker 1 (05:22):
Right, fair enough, you have a good weekend. Appreciate it
very much. Nichola Willis, the Finance and Economic Minister.
Speaker 2 (05:28):
For more from the My Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
How about that week in butter Ray and is it
any cheaper? No, it is not. Have we learned some
lessons around pricing in international markets? Might have In the
midst of all of it was the Finance Minister, Nikola Willis,
who was with us. Good morning, Good morning, make Did
you overplay your hand?
Speaker 2 (00:14):
No, I didn't, I would I would say the media
got very excited. As you know, I've been talking about
supermarket margins and that context. I did confirm that the
next time I was speaking to Fonterra it wasn't issue.
I'd talked to them about. Obviously, they're a big food
supplier in New Zealand, so their perspectives on supermarket margins
and competition are of interest to me and I think
(00:35):
probably to most New Zealanders. And in the context of
butter it came up. I did talk to Miles Harrel,
the chief executive, about that, and ultimately I think it's
pretty useful that he has been talking with New Zealanders
about how much global demand there is for this beautiful product.
What did you say that that's bringing you into the world.
Speaker 1 (00:56):
Why did you stand that you looked on the tiles
this week as I watched you like you had an
oozy in your handbag and you're going to gun them down.
If there wasn't a good explanation, then you came out
went oh bugging me that it isn't international markets.
Speaker 2 (01:08):
No, not at all. I know, not at all. I
was very clear that commodity prices internationally are the major driver.
I've been saying that consistently for a long time. But
that also I was interested in how Fonterra in the
supermarkets divide the costs in the margin at the margin.
Speaker 1 (01:27):
But you know that they know that, you know how
they do it because you work for Fonterra.
Speaker 2 (01:31):
Well, I worked for Fonterra nine years ago. I never
was branded part of the business. In the branded part
of the business. Well, actually, competition should rightly be a
dynamic thing, and you would expect over a nine year
period that pricing behavior between different supermarkets and different suppliers
could change, and in the context of a very high
(01:51):
commodity price, I think it's a good question to say, well,
what does that mean for margin behavior? I think it
is interesting that what we've had revealed this week is
that supermarkets are choosing quite different margins on butter you've
had some say, actually we're taking a loss on it.
At the moment, it's pretty clear that with cost cos
prices it would appear loss on it. Well, well yes,
(02:14):
And wouldn't more of that happen if there was more competition?
Speaker 1 (02:18):
What they'd all lose money? Is that where we're heading forward,
see the would.
Speaker 2 (02:22):
Distinctive choices make about how they want to get customers
in the door. And what you can see in competitive
markets is that grocery chains do everything they can to
get customers in the door and get volume out the door,
and then they choose selective products, including staples like butter
or bread or milk, where they choose to take a
loss so people come in the door and buy their
(02:44):
other products. Who win's out of that loss.
Speaker 1 (02:46):
Here's my concern for this over all debate. We're wasting
our time. We've got more important fish to fry. And
I'm watching the news last night with yet another bunch
of myopic New Zealander sitting in malls around the country
going well, why don't we have a domestic price? And
we know why we can't have domestic price, but that's
all we bog ourselves down on this stuff, and it's
wasting our time, but is the price It is because
(03:07):
it's a success story and we're reaping the rewards for that,
and instead of celebrating it, we're having stupid meetings explaining nothing.
Speaker 2 (03:15):
Well, look, I do celebrate our successful dairy industry. I also,
as a representative, think that if New Zealanders are really
engaged in an issue, it's not enough to just say
to them, sorry, not an important issue, not going to
talk about it. I think it's good that we've now
had communication about here's how the global price works, here's
how's most of the price is formed, Here's what happens
(03:38):
in terms of competition, here's what you can expect in
terms of the price in future. And politicians do have
a choice. We can say, look, I'm not going to
talk about that, it's not important, but I am not
prepared to dismiss questions from New Zealanders in that way.
I think that they have got more information this week,
and look, I'm with you. A successful dairy industry creates
(03:58):
jobs and better income for Kiwi's. That is excellent. It's
also the reality, but it is expensive in supermarkets right now,
so people are more interested in commodity pricing and margin
pricing than they've ever been. And I don't think it's
a sin to talk about it.
Speaker 1 (04:13):
Super quick word if you would on Adrian or why
did you make it such a big deal? Guy's self important?
He packed a big sat at a couple of meetings,
one of which was with you, why didn't you say that?
Speaker 2 (04:25):
Well, all I have said is that.
Speaker 1 (04:27):
I know what you've said, but what you should have
said is the guy myself importantly stormed in my office,
yelled a bit at me, and then quickly had to
write a letter and then he quit.
Speaker 2 (04:36):
Well, my perspective on it has been he was employed
by the Reserve Bank. They undertook employment discussions with him,
he resigned. Not for me to get into the middle
of that employment relationship and start speculating and using have
gone on, Well, whether or not that was relevant to
(04:56):
his resignation, Well was the Reserve Bank. Well that's a
matter for the Reserve Bank and not a matter for
me to speculate on. Wherever I have been able to
be candid, I have been. But you've got to remember
there's two things I have to protect here. One independence
of the Reserve Bank and their role as an employer. Two,
I shouldn't be the one giving rise to potential legal
(05:17):
financial risk to the New Zealand taxpayer. As much as possible,
I think it's right for me to stay out of
it all.
Speaker 1 (05:22):
Right, fair enough, you have a good weekend. Appreciate it
very much. Nichola Willis, the Finance and Economic Minister.
Speaker 2 (05:28):
For more from the My Asking Breakfast, listen live to
news talks that'd be from six am weekdays, or follow
the podcast on iHeartRadio.
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