Nosh say dairies 'exploiting' cheap milk for on-sale

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Wed, 15 Feb 2012 6:52p.m.

Nosh says it loses 50c on each two litre bottle it sells  (file pic)

Nosh says it loses 50c on each two litre bottle it sells (file pic)

By Tony Reid

A milk price war is starting to break out but not where it counts - at the big supermarket chains.

Instead, Nosh Food Market is taking a swipe at smaller competitors who it says are buying Nosh's cheap milk then on-selling it for a profit.

At $2 for two litres Nosh's milk special is proving a big hit with customers.

“Probably up 30 percent in terms of what we're selling, we've had to put fridges in to cope with the volume,” says Paul Cibulskis, Nosh’s Mt Eden owner.

Nosh takes a 50c hit on each two litre bottle it sells.

But not everyone who is buying the milk is drinking it.

“It's an unfortunate incident that happens on a regular basis as far as trade coming in and purchasing the milk to on-sell,” says Mr Cibulskis.

3 News found one such example a few hundred metres up the road from Nosh.

Owners at a small store confirmed sending their children to Nosh to buy milk on numerous occasions.

The owner of the dairy did not want to appear on camera but says she bought the milk from Nosh because it was cheap and she could make a profit.

She says Nosh is selling milk at such a low price, it is killing her business

“Look, it is what it is, and people just exploit it for whatever means possible. I've seen them back again yesterday. But that's just the way it is,” says Mr Cibulskis.

But Jubeda Patel who owns a superette in Auckland’s CBD says milk pricing is the cause of this war between Nosh and the dairy up the road.

And she says Nosh is being a bit precious. 

“I don’t think she's doing anything wrong. She's running a business which is hard for everyone. She's paying the price that Nosh is asking. And Nosh may be closing earlier hours and she may be able to offer it at a different hour to them,” says Ms Patel.

Nosh has now told the owners of the dairy not to come back.

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Comments

17 Feb 2012 06:56p.m.

nyleen wrote:

That's why major supermarkets have amount limits on their soft drink & lollies specials

16 Feb 2012 07:54a.m.

Mike wrote:

That is why most dont make loss leading products. If you dont like selling below cost, dont sell.

If you can't afford to sell a couple of bottles of milk below cost, dont whinge about it when people take you up on buying your loss leader.

A sale is a sale and Nosh should be happy selling. Maybe it is more than just claims of small businesses buying? Maybe it is targeted racism. eg take the numbers of Asian/Indians who fit the 'Dairy Owners' - maybe this is another plug at racism under the guise of milk prices?

Nosh has said it has lowered the price of milk below cost for the benefit of consumers. It doesn't matter what part of NZ people belong too. Even Dairy Owners are part of NZ and consumers, as is the whole food trade. What next? A coffee shop buying milk for coffee is also reselling milk? Anywhere making milk shakes, or adding milk to anything like baking? Is Nosh going to black list 1/2 of Auckland? That will create bad will which will more than offset any good will created by their lower price milk.

15 Feb 2012 09:42p.m.

Ruz wrote:

Dairies often buy stock from other retail sources such as supermarkets when certain items are heavily discounted. They are easy to spot because they are the ones with a trolley full of the same item.