Monday, 17 December 2012

Glad to see Fonterra has proved me right

Earlier I argued with regard to Fonterra's "Milk In Schools" program that,
Or if you get the kids drinking milk now and they keep on doing it you have, with a bit of luck, created a market for milk in the future. What firm wouldn't want this?
Well Fonterra wants it. From the TVNZ website comes this,
Fonterra announced it will roll out the "Milk in Schools" to every primary school in the hope of a future pay day.

"Long term we want to have these kids on milk and not on carbonated drinks when they are 20 years old," says Spierings. "And when they earn a salary, they go to the supermarket and buy our milk."
Now all the owners of Fonterra have to ask is, Is this the best way to build a future market for milk? It does look an expensive way to achieve the end.


Mark Hubbard said...

There are dual reasons for launching this policy, Paul. The other is to try and counteract political activity around the milk price and the milk pricing mechanism. Probably the closest we get in NZ to out and out lobbying.

Eric Crampton said...

You know who else gives free samplers to kids hoping they'll be hooked as adults? Drug dealers, that's who.

Or at least I'm waiting for one of the anti-dairy folks to start up with that line of argument.

Think Mark's right about one of the policy drivers here.

Paul Walker said...

I agree there is more to the program than just creating future demand, but that's part of it. At worst its a positive externality from Fonterra's point of view.

Eric Crampton said...

Aww, now you're trolling me. It can't be an externality if Fonterra is residual claimant!