NZ prices: Theft by another name

Ship loading with chocolate biscuits from WikiCommons

Kiwi myth exploded: Generations of honest New Zealanders have been paying a massive premium for imported goods. But a little bit of maths shows shipping costs are a minor part of the overall price. Kiwis are being shafted.

If you have been following my ongoing campaign of whingeing about NZ prices then you'll know how horrified I was by the revelation that the mighty fine McVities choclate biscuit can cost up to four times the amount in NZ as in Blighty.

As far as I am concered, this is not just a minor pertubation in the landscape of world commodity prices, it is burglary on a scale to be compared with Watergate, The Great Train Robbery or the willing-coalition's theft of Iraq's oil.

With each mouthful I feel I have been well and truly rogered in the wallet, and this is duplicated up and down the great-green land of NZ on a daily basis.

Innocent theft

Unconcerned Kiwis wave this phenomonen away with dismissive comment about how foolish it is to buy imported goods, but this has always felt like an excuse for not getting angry.

After all, the good people of the UK don't pay any more for goods imported from China, they are, in fact much cheaper.

So I conducted a thought experiment in the costs of importing a packet of choccie biscuits.

One standard 40 foot container has an internal volume of 67.3 cubic meters according to http://www.srinternational.com/standard_containers.htm

A packet of biscuits making a few estimates is roughly 0.3*0.08*0.08 = 0.00192 cubic meters. Let's call it 0.002 cubic metres for simplicity and to allow for packaging.

Dividing one by the other gives us the number of packets of biscuits in a single container. 67.7/0.002 = 33,850 packets.

Import premium

Pickfords in NZ gave me a rough cost of shipping a 40' container from the UK as about £4000, so that means each packet of biscuits has a shipping premium of ... wait for it.... 12 pence, or to be generous, 25 cents (NZ).

The asstute among you will notice a few estimates here, and it might need to be a refrigerated container, there could be an insurance premium etc. Please leave a comment if you think you can help narrow down the cost to a more realistic figure.

Nevertheless, it is clear that shipping costs are not the big factor New Zealanders will have you believe, and you have to wonder where all the extra money is going.

Suggestions anyone?

Comments

[Alan]

The pork factor has always been the fudge in exchange rates. Shipping is peanuts.

If you've having to pay NZ bank charges for 'offshore handling fees' plus their loaded rate, then having a markup price of NZD3:UKP1 isn't unusual, irrespective of what the actual shipping cost is.

[apologies for the foodie puns]

[William Knight]

Ha... food for thought. But it still only amounts to a hill of beans on the price of a packet of biccies. Say the exchange rate is 3 to 1, then the packet should be about 36 cents more expensive.

[Domestic Executive]

I think you may be right but then it's not in the kiwi psyche to stand up and make a fuss!

[Ethan Tucker]

There's not enough demand for there to be active competition to supply Chocolate Hob Nobs to the NZ market. The retailers who choose to supply them know they've got a captive market and presumably the small volumes they deal in lead to higher than normal overheads. Personally, I think it would be great if a container of Hob Nobs arrived to educate the NZ palate, but realistically not enough people have heard of them to make it worthwhile.

Speaking of competition, there was an interview with the NZ head of Specsavers who said that the UK eyewear retailers were shocked at the prices of glasses in NZ; presumably their rapid expansion in NZ has injected a competitive edge into that particular market. Now all you need to do is convince them to sell McVities as a sideline :)

[William Knight]

All this is true Ethan, but Ive looked at the prices of other choccie biscuits, and theyre not much cheaper. I havent done a detailed analysis, but budget brands in the UK are about a quarter the price of budget brands here --- there does seem to be across the board profiteering on goods and services here in NZ

[Myk]

Interesting ... last time I flew from the UK I was sat next to a packet of biscuits. I would have thought this outrageous except I was traveling economy class, so some savings there I think.

[Avalon]

Just teasting - cos my comments seem to be dissapearing into a black hole :)

[Tanya]

Forget the choccie bickies I'm stuck with worn out Adidas runners because I refuse to pay 200USD here in Cambodia for them when I can get them from Rebel in NZ for under 150NZD...and they're made here!!! (No I can't just buy the market ones they are all second hand seems Adidas has worked out a way of keeping their shipment in the container unlike Columbia, North Face, Gap, Billabong, Abacrombie etc all of which I can buy new for a 5th the RRP)

[Avalon]

Pak N Save in Masterton is actually selling UK foods without such a huge markup. Yorkshire tea is $7.95 - you can pay upto $16 in Wellington (And Kirkaldies had a Tin of Yorksire Gold Tea for an eywatering $42!!!

Oddly enough, P&S is selling Happy Shopper brand for a lot of things - whcih menas a box of 15 "jaffa cakes" is only $4.95.

If you ever pop up to the wairarapa - its well worth a visit.

[KiwiinuK]

Just as a turn around to that I saw NZ manuka honey in the cooperative supermarket today for 9 pounds - do you think I baulked at that? You betcha - love manuka honey just not that much.