Hurrell explicitly stated that Fonterra neither can nor will implement a two-tier pricing system that differentiates between local and overseas customers. He explained that a substantial portion—approximately 80 percent—of the retail price of a block of butter in New Zealand is dictated by the international dairy market. This is primarily driven by robust global demand for dairy fats and protein, particularly from key markets like China, which sets the competitive benchmark for dairy commodity prices.

The Fonterra CEO further clarified that the cooperative’s overriding responsibility lies with its 8500 farmer suppliers across New Zealand. He emphasized that strong dairy prices on the international stage are inherently beneficial for the broader New Zealand economy, as the nation is a major dairy exporter. This highlights the tension between maximizing returns for dairy farmers in an export-led industry and addressing domestic consumer affordability.

While Fonterra determines the wholesale price for its products, Hurrell also pointed out that the final butter prices on local supermarket shelves are ultimately set by retailers. These retailers, he noted, determine their own costs and profit margins, which contribute to the final price consumers pay. This distinction places a portion of the responsibility for high retail prices on the local dairy supply chain and supermarket competition.