“Local competition” is among factors cited by dairy owners for wildly varying prices for every-day grocery items like baked beans.

The issue came to light in a leaked email from a dairy-owner in the lower North Island to her partner. Instead of reducing prices in response to dwindling sales of baked beans, the email proposed to increase prices across the dairy’s entire range to recoup lost sales margin. The pair hoped competing dairies would follow suit.

Responding to media disquiet, the dairy owner said she had “no option” but to lift prices on other essential grocery items to compensate for the drop in baked beans volumes. “Competition is particularly intense for Watties family-sized tins but less intense on other products, where I can achieve higher margins,” she said.

After a meeting with dairy-owners at the Beehive to discuss pricing tactics, the Minister said the baked bean market is “broken”. “What we’re seeing here is an example of a market that isn’t working for consumers. I think we’ve seen some pretty cynical behaviour. I don’t think this is isolated” she said. Former minister Judith Collins expressed similar concerns.

And Prime Minister Jacinda Arden was having “trouble trusting” dairy-owners after the leaked email spilled the beans on dairy pricing policies.

The Minister of Commerce and Consumer Affairs said that the government was looking at giving the Commerce Commission more power to investigate businesses and the high prices they charge. “What we’re seeing… is price setting going on to actually take prices up to the highest level” he said (clearly not impressed with the approach of the corner store’s bean counters). The Commission’s proposed new “market studies” powers will expose this type of profit-maximising behaviour.

In a pre-prepared media statement, the dairy-owner claimed she was “only trying to achieve a sustainable return.” This prompted her decision to lift prices. She was unaware this was no longer acceptable.

Market commentators observed that there is nothing saying businesses “must set a certain price”, and cautioned against re-introducing price controls. “Uniform pricing could mean parts of the North Island, where costs are lower, might end up paying more for beans than they are currently. Half the country will be happy, and half the country will be unimpressed.”

With no obvious pricing solution, the government may have to look elsewhere to address the pricing differentials. Perhaps a regional bean tax?