High butter prices hitting bakers

Photo: RNZ / Eva Corlett

The rising cost of butter and other dairy products is hitting bakeries and other small food businesses hard, the Baking Industry Association says.

Butter prices continue to soar - last month 500g blocks hit a record high price of $5.39 and on Countdown's website last night, several brands were at $6.

Demand for butter has blown up worldwide after scientists debunked research linking animal fats with heart disease, ASB economist Nathan Penny recently told RNZ.

But bakeries have limited options as to how they can combat the high prices, says the association's president Kevin Gilbert.

Many absorb the cost, use alternative ingredients like margarine, or have to increase their prices, which consumers do not take sweetly to.

"There is a limit to what the consumer will accept in increases, they do not necessarily appreciate the background costs skyrocketing on one or two items.

"It is a difficult industry to be in anyway because the perception of what we do has been tainted by the $0.89 loaf, so many consumers do not understand the difference between an $0.89 packaged loaf in a supermarket and what a bakery makes."

To on top of that have ingredient costs continue to rise - butter rose 70 percent in a year - was a continued battle, he says.

"It is cheaper to get imported French butter, travelling all that distance and up 'til now it has been seen as an extravagance, but it is now cheaper to get that than it is to get stuff across the ditch [for Australian bakers]."

"It is getting very close to that for us as well. We are being offered European butters that would be cheaper."



7 Comments

@Capt Caveman

Posted on 16-10-2017 07:49 | By Papamoaner

Or at least a slice of it.

Fontera

Posted on 12-10-2017 21:54 | By Capt_Kaveman

share the wealth , yeah right

@GreertonBoy

Posted on 12-10-2017 20:32 | By Papamoaner

Crumbs mate, your crusty pun about the dough was rather sour. You ought to stop loafing around and rise above such stale humour.

Import

Posted on 12-10-2017 14:06 | By dave4u

butter/cheese/milk etc bet that lowers the price of local dairy

Shameful!

Posted on 12-10-2017 12:12 | By GreertonBoy

Bakers always work so hard... early morning starts.... They only do it coz they kneed the dough.... no other raisin...

Unfortunately though -

Posted on 12-10-2017 10:56 | By Papamoaner

Local commodity prices are tied to the export price and it's very difficult to separate them, so it's an ironic mixture of good news and bad news depending on your stance. For example, The high price is good for our primary industry, but farmers still have to pay the higher price at point of sale unless they make their own butter for personal consumption which might not always be practical. Bit of a chicken and egg situation we have to live with really.

Disgusting

Posted on 12-10-2017 08:56 | By overit

In a country that produces so much food, we have to pay so much, especially for dairy products. I hope Winston does something about GST on real food.

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