Oscar Wilde warned against knowing the price of everything, but the value of nothing. This week we've seen the government realise the value of milk and opt to find out the price, while adidas know the price of a rugby jersey, but not the value...

And so the government has come around, and announced a select committee inquiry into the price of milk. It's a U-turn (or should that be moo-turn?) for National given its confidence at the start of the year that no such inquiry was needed.

It was clear such a backdown was imminent when Agriculture David Carter went on Q+A on Sunday and said he saw "some value" in an inquiry, for which Labour, the Greens and Consumer New Zealand have long been agitating. John Key says the select committee will be given wide powers.

That's a far cry from February, when Carter was reported saying that such an inquiry was unnecessary, given the three ministries investigation already underway and due to report before the end of the year:

"Let's wait and get the report that I've called for, which at least will give us some indication as to how the competitive market is working," he said.

Six months later, however, there's no more time to waste. Why? The election, of course. National has a comfortable poll lead, but one of the places it remains exposed is the cost of living.

As Food and Grocery Council Chief Executive and former National MP Katherine Rich has said, her organisation's polling shows that food prices are on of the public's top concerns. On such hip-pocket issues are elections fought.

On National's watch, food, petrol, power and rates bills have gone up and up. Voters have been very patient with the government, tending to blame the global recession and being inclined to like John Key. But voter patience is always finite. That's why three out of every ten words Labour leader Phil Goff says are "cost of living".

So what does the select committee need to do?

 

This is the start of my post at tvnz.co.nz. To continue reading, click here. But feel free to add comments and debate below.

 

 

Comments (4)

by Brendon Mills on August 10, 2011
Brendon Mills

About 20-25 years ago I think you used to be able to buy milk straight from the dairy co-op factories, who ran their own stores. Then I gather the milk industry was deregulated and the co-ops all merged into Fonterra, and we have hundreds of relatively modern dairy factories all over taranaki that are either falling apart or used to store fertiliser.

It seems to me that the simple thing that would give people access to cheap milk would be to somehow lobby Fonterra to open their own retail stores which would sell to customers at wholesale prices. I think Fonterra has a discrete store in Eltham that sells cheese. It would be a solution that would benefit everyone, rather than using price controls, or subsidies, or any other politically incorrect mechanism,

by Brendon Mills on August 10, 2011
Brendon Mills

As for Adidas, I really dont see what all the fuss is about. They can charge what they want for their jerseys (though I think asking online retailers to stop selling them cheap to New Zealanders was below the belt). If anything we should be blaming the NZRFU for shafting their fans for the sake of profit, ie, selling out to Sky, and ditching Canterbury of NZ for Adidas in the first place.

by stuart munro on August 10, 2011
stuart munro

Profiteering, or price gouging as it is sometimes called is traditionally illegal in New Zealand, there were some powers in consumer legislation to address such issues, but they were seldom or never invoked.

Adidas is right out of order - you might argue they are free to charge anything they want, but if it is proper for them to sell at half that price in the US, it is equally proper for Kiwis to order the product from the US. Adidas, by constraining sales to NZ are making and mean to profit off a monopoly. If the Rugby Union had any moral fibre (big joke) they'd ditch Adidas over it. Small chance of that.

The milk is another unsavory monopolistic rort. Any investigation should look into dairy products in general, because butter and cheese are also astonishingly high, and with the anomalously high $NZ that is not driven by offshore markets.

The simple fact is that when you get governments of lazy, greedy and egregiously stupid people, like the last two, they fail to protect the public. Do it long enough and we'll have riots that make England's look like a teaparty.

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