Friday 11 May 2012

Cartels versus Babies [Updated]

Canada's dairy cartel keeps milk product prices up. Baby formula is one pretty obvious example.

Here in New Zealand, a 900 gram can of baby formula (starter, for newborns) ranges in price from $15 for one that's on special, to $20-$21 for the most popular brands, to $34 for the ones that give babies superpowers. We supplemented with the brand that's now $21 per can. The NZ price range then, per kilo and in Canadian dollars at $1 NZ = $0.79 Cdn, is $13-$30; the one we typically bought was $18 Cdn. Unfortunately, the link might redirect to Countdown's main site. A screenshot is below.

It's harder to get Canadian prices. I tried Safeway, but all I can find are store-specific flyers. Same for The Real Canadian Superstore, and the same for Loblaws. Bizarre how much better online shopping is in NZ as compared to Canada. What online grocery shopping places I could find wouldn't list baby food prices. So, I'm stuck with sale flyer prices, which are biased downwards relative to average shelf prices for comparison purposes.*** See update below.

There's no baby formula currently on special on the Safeway flyers, or at least not the ones I found. The Real Canadian Superstore has Enfamil at $36/kg on special, with a $40 price if you buy more than 4. Even if that's the kind that gives superpowers, it's still well over the top end of the NZ price range even when it's on special. Maybe it gives even more superpowers than the high end NZ formula, but I'd be surprised. A Loblaw's Flyer has Similac on for $34/Kg and "Nestle Follow Up or Enfagrow toddler powder" at $18/Kg, but toddler formula is cheaper than starter formula in NZ too.

Bottom line, it's awfully hard for me, from here, to tell how much the Canadian dairy cartel is extracting from Canadian babies. Here in New Zealand, we're typically paying about $18 Cdn per kilo of starter formula. It looks to me like $30/Kg would be a good price in Canada given those flyer prices. If you're in Canada and paying substantially more than the $18/Kg we're paying in NZ, thank your local dairy cartel.

Update: Mike Moffat kindly links to WalMart's prices. It's a pain, because you have to tell it for each product the city for which you want prices. I picked Winnipeg because everybody knows that Winnipeg is the cheapest city in Canada. So I hope this is the best set of Canadian prices. Here are a few of them (I checked a few randomly):
  • Similac Go and Grow with Omega 3 and 6, 728 g Powder. $28.97 = $39.79 /kg
  • Good Start Probiotic with Omega 3 & 6 - 640 g. $28.97 = $45.27 / kg
  • Enfamil A+ Tub 663G. $28.97 = $43.70/kg
  • Similac with iron, 900g Powder. $18.86 = $21/kg
  • 730g Parent's Choice Gentle Infant Formula with Omega-3 and Omega-6. $19.77 = $27.08/kg
  • Isomil Advance w/ Omega 3 and Omega 6, Powder, 800 g cans. $28.97 = $36/kg
  • Nestle Good Start 900g. $18.86 = $20.95/kg [note: not sure if this is newborn formula or for older toddlers]
  • Similac Advance with Omega 3 and 6, 728 g Powder. $28.97 = $39.79/kg
Where the NZ price range looked like $13 - $30 per kilo in $Cdn, the Canadian price range seems more around $21-$45. Note that all NZ prices include 15% GST; we would add 15% to all Canadian prices to make them properly comparable.

I've had a bit of a Twitter discussion with some of the Canadian dairy lobbyists. One pointed to prices that aren't available online or are available at discount shops [all NZ prices are from our version of Safeway, I didn't go searching for discount shop prices]. Dairy Farmers of Canada says I'm making false allegations:

What's false?

Read above. I've never claimed that Canada makes baby formula. I have claimed, and continue to claim, that the completely messed up Canadian supply management system results in Canadian infant formula prices being way out of whack; it doesn't much matter whether it's because they make it in Canada but at high prices or import it with tariffs. I was surprised that a Canadian dairy lobbyist didn't know whether they make baby formula in Canada. I was also surprised to have them claiming that supermarket concentration in Canada is what drives high Canadian prices rather than their cartel. NZ's supermarkets are effectively a duopoly, so I doubt that's what's making the difference.

1 comment:

  1. Eric, can we do some good stuff dude, please don't send us down to the baby formula.
    We like baby, we will look after your girls if you die, I can promise that because we like baby and New Zealand, even Canadian at a stretch, but we don't want to do baby formula comparison,between Canada and Australia and that stuff.