"Kiwis not getting a raw deal" on butter prices

[nzoomed]

 Perhaps you've not heard but sometimes there can be both an overseas price & a domestic price for the same product....

Maybe but Fonterra in this case are paying their farmers a price based on international price parameters so if they reduce prices for domestic destined products then who wears the lower price. 

Do they pay some of their suppliers less because their milk is destined for the NZ market? I suspect the farmers wouldn't be lining up for that deal. 

Do Fonterra take a hit on products sold in NZ using milk bought at international linked price? Can't see that being popular as Fonterra's intent is to maximise profits for their shareholders so again it would impact farmers, just over a wider base.

Opening up NZ's imports of butter from other countries may help to apply market pressures on Fonterra but there will be many who prefer we maintain a protectionist approach to our primary industries.

Not a simple issue to address for sure. I'm just happy to be dairy intolerant so not directly affected by this kerfuffle.

That is likely the problem, because farmers get paid international prices, then there is no easy way to regulate the prices without fonterra having to front the (potential) loss.
I bet there is a huge profit margin on all sales however, then there is the middle man supplier between them and the supermarket who slaps on a profit just for moving stuff on.
Domestic sales of dairy products are like only 5% or less of their total sales, the rest gets exported, so it is a small amount of their profit.
When I was in Costco last month, they sell 1KG blocks of NZ made butter for $10, how are they able to do it for half the price and still sell for a profit?
I highly doubt Costco sell any of their products at a loss, some speculate that their memberships offset the profit loss, but I dont know if thats 100% correct how their business model works.
I know their kirkland butter is produced by a Chinese company based here, perhaps they pay their farmers less? Im not too sure, but they are definitely able to supply what appears to be a high quality product for less.
I imagine we are being ripped off quite a bit for most of our food, thats capitalism for you.