PKF Francis Aickin Limited, Far North, New Zealand
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20 Nov 2014
Over recent weeks there has been a robust debate in this paper about the merits of doing business and shopping locally. Thanks to local business man Ian Walker for kicking this off. This is also a subject we've written about in the past, and I'd like to pick it up again, starting with a point made by one of the contributors to the paper. That if we, the buying public, don't use our local businesses and shops, we will lose those businesses.
There is no better example of what can happen if we don't use local businesses, than what happened a few years ago to the Far North's bottled milk producer, Topmilk. I was a director of that company and became closely involved in the battle the company had against competition from much bigger Southern milk supply businesses. Sadly, Topmilk ended up losing that battle.
Recent milk price rises are also a reminder to us of what the long term consequences of price battles can be.
Topmilk had been an innovator in the milk industry, and produced some of the cheapest retail milk in the country. Remember the $1.00 per litre sachets? That was quite an influence in the milk market, as it was a threat to the pricing of the large milk companies. Those companies responded agressively and hit the Far North hard. It was made attractive to local retailers to stock southern milk, and consumers responded. In spite of holding prices, including supplying cheaper milk to Auckland and Whangarei markets, Topmilk lost market share and eventually had to close.
As a result, the Far North lost the following:
In short, most are worse off for the decision that many consumers made a few years ago not to buy local milk. All except the two big milk companies that is!
So what do we learn from this?
A good question to ask oneself is this: if everyone shops like I shop, how would that ultimately affect my business, income, or job?"
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