By 3 News online staff
A milk ‘price war’ is underway in New Zealand with consumers, farmers and some smaller supermarkets rallying together to keep prices down.
The price debate reignited this week after boutique supermarket Nosh reduced their milk price by more than 50 percent to $2 for two litres.
They now say they will keep milk cheap until the end of the year.
The new price is proving popular with Nosh selling thousands of bottles since the price was changed.
“We have probably sold 20 times more milk that we would normally sell," Nosh Food Market chief executive Clinton Beuvink told the New Zealand Herald.
Daycare centres and kindergartens have also erected signs informing parents and caregivers of the reduced price.
The price of milk became a political issue last year after consumers complained of being ripped off - and initially directed their anger toward farmers.
But farmers say it is retailers who ramp up prices and have welcomed Nosh’s announcement.
"There's a price war in one location at least and Federated Farmers hopes it's just the first step," dairy spokesman Willy Leferink says.
"It's happened in the UK and Australia so why not here?"
Mr Leferink is urging people to shop around, saying some dairies and petrol stations are selling milk a lot cheaper than supermarkets.
At least one small store in Papakura is also selling milk for $2.
Mr Leferink says big supermarkets rely on being convenient, but convenience does not make them cheaper.
In Wellington the price of two litres of budget milk ranges from $2.99 to $3.65.
"That's not only 22 percent more but tells me that margins at the retail end are pretty healthy," Leferink told Stuff.co.nz.
So far supermarket chain owners Progressive and Foodstuffs have said they do not plan to adjust prices in response to Nosh’s discounts, calling it an unsustainable "gimmick" to get more customers.
But Consumer NZ chief executive Sue Chetwin refutes such claims, saying larger chains can reduce prices and still make a profit.
3 News / NZN