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Image: Tina Tiller
Image: Tina Tiller

MoneyJuly 27, 2022

Cheap cheese-buying hack revealed: just wait until next week

Image: Tina Tiller
Image: Tina Tiller

Investment advisers always say you should never try to time the market, but based on our analysis of cheese prices, maybe it’s worth a go?

DISCLAIMER: The content of this webpage is not cheese investment advice and does not constitute any offer or solicitation to offer or recommendation of any cheese product. It is for general purposes only and does not take into account your individual cheese needs, cheese objectives and specific cheese circumstances. Cheese purchasing involves risk, and you should consider your long-term cheese risk profile before purchasing any cheese.


Our team of cheese analysts have pored over the data collected since launching The Spinoff Cheese Index and noticed something pretty clear: most 1kg cheese blocks are discounted on a predictable week-on/week-off basis.

Made with Flourish

If you look at the above graph, it’s evident that Alpine Tasty and Mainland Colby cheese are regularly discounted for a week-long period every fortnight – so they’re on special for a week, then return to their “normal” price for a week, then go back on special for a week, and on and on it goes.

Alpine Colby is a little more erratic, but it is also frequently on special. We’d like to think that the price of Alpine Colby briefly plummeting to $9 was a reaction to the TSCI launch, because we have not seen that steep discount in the last month.

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Gabi Lardies
— Staff writer

Are these special prices in fact special?

This got us thinking: if prices are changing so frequently, how do we know which is the real price and which is the “special” price? On its website, the Commerce Commission says of discounts: 

“Businesses often discount goods and services and advertise the savings you can make by buying at the discounted price. A business that makes these types of discount claims might mislead consumers if: the claimed usual price is one of many prices at which the business commonly sells the good or service.”

We asked the Commerce Commission for comment on this specific fluctuating cheese price, and a spokesperson said if a business routinely sold products at a promotional price, that promotional price becomes the usual selling price. “It would be misleading for a business to keep claiming it was discounting a price if the discounted price was the usual selling price.”

The spokesperson said as the commission hadn’t investigated this specific example, it couldn’t comment on any potential breach of the Fair Trading Act. “Generally, to determine the usual selling price it is helpful to have a longer sample of pricing information than that provided.”

They also said, however, that “in our market study into the grocery sector and the final report released in early March 2022, we identified several areas under the Fair Trading Act and Commerce Act where we intended to consider further compliance and enforcement actions.

“This ongoing work is a priority area for the commission, and includes restrictive and exclusive covenants, refusals to supply due to low retail pricing, and pricing and promotional practices.”

Unfortunately none of this is a major surprise. That same market study highlighted the excessive discounting and promotional pricing conducted by New Zealand supermarkets:

(Source: Commerce Commission market study into the retail grocery sector final report, data from Nielsen Scantrack and Nielsen Homescan)

Regardless of the moral or legal implications of these weekly price changes, unless you’re scoffing more than a kilo per week you should be able to time your purchases to always access the discounted price – assuming our sleuthing doesn’t cause the supermarket to change its strategy.

What about the never-discounted king of cheeses?

Bucking the fortnightly trend is Mainland Tasty. Unsullied by cheap tricks, the bougie paragon of cheeses never budges from the perfectly round price of 20 dollars and zero cents per kilogram. A price that one supermarket steadfastly claims is “great”:

That supermarket would of course argue that many of their prices are also “great”:

We asked Consumer NZ for its thoughts on supermarkets using big “Great Price” stickers on products that are rarely, if ever, discounted, and a spokesperson said this type of marketing was “certainly ethically questionable”, with a question mark over its legality.

The vagueness of this statement means supermarkets can hide behind an impression you are getting some type of added value in the price, when this may not be the case.

“There is a question mark over the legality of this type of marketing and whether it is misleading or not will depend on the precise example and the circumstances. It is certainly ethically questionable, given the evidence of consumer confusion. We think the Commerce Commission should use its powers to require supermarkets using this type of marketing to substantiate their claims.”

Remember, as a wise investor once said: there is always free cheese in a mousetrap.

*The supermarket in question did not respond to request for comment by deadline

Keep going!
Image: Tina Tiller
Image: Tina Tiller

OPINIONMoneyJuly 26, 2022

What’s the bigger outrage – $20,000 for a documentary or $1 trillion in windfall gains?

Image: Tina Tiller
Image: Tina Tiller

Amid calls for Covid ‘cash handouts’ to end, Bernard Hickey suggests a more useful debate: how can we get the beneficiaries of billions in unearned pandemic-era gains to hand some of it back to taxpayers?

This is an edited version of an article first published on Bernard Hickey’s newsletter The Kākā.

There was a flurry of pointless clickbaitery on Friday that seemed to capture the zeitgeist of how many on both sides of the political divide feel about this next phase of the post-Covid lockdown period. One side believes the Covid “cash handouts” should stop, but doesn’t believe the ones they received counted or should be returned. The other side is increasingly calling for the beneficiaries of unearned Covid-era gains to hand back at least some of their windfall gains to taxpayers at large, to help those hurt most during Covid.

Here’s the latest skirmish. The NZ Herald and Newstalk ZB removed an article on Friday by Newstalk ZB deputy political editor Jason Walls that challenged what he described as $20,000 of NZ Film Commission funding for a short documentary made during the first Covid lockdowns about public scientist Dr Siouxsie Wiles:

“I’m just so sick of everything getting taxpayer money for these projects. Why can’t people just pay out of their own pocket? I just keep seeing these things crop up time and time again, when we have hospitals overwhelmed. Twenty thousand dollars is not tons of money in the grand scheme of things, (but) that sort of stuff keeps adding up.” – Newstalk ZB deputy political editor Jason Walls on air last week, as RNZ’s Colin Peacock reported yesterday

An article summarising Walls’ views was published online afterwards, although removed on Friday after Wiles publicised her unhappiness with it.

“Would you pay $20,000 for a documentary about ‘science superhero’ Dr Siouxsie Wiles? Because you already did,”  the Herald’s story began. 

The implication was that $20,000 of taxpayers’ money was “wasted” on publicity for a scientist. As it turned out, the $20,000 referred to was for another unfinished project and the project had actually cost the documentary maker $8,000, with a further $7,685 in funds raised via a Kickstarter campaign from the public.

Aside from the factual issues with the piece, it struck a nerve with Wiles’s supporters. It also struck a particular nerve of mine, regarding NZME’s use of publicly provided funds during and since Covid, and the apparent hypocrisy of some of its commentators about private use of public funds.

I tweeted this on Friday night in response to Wiles’s tweet.

NZME got $12.9m of public cash and will pay $15m in cash to investors

The owner of NZ Herald and Newstalk ZB, NZME, received $8.6m of wage subsidies, which it has refused to repay (detail here via RNZ). That is on top of $4.3m of public funds from the Public Interest Journalism Fund and other public funds to pay for journalists working for NZME and specific projects over the last two years. The $12.9m in public funding helped stabilise NZME during Covid, but the company has now returned to growing its operating profits and has reduced debt substantially.

In fact, NZME is now in the process of returning $15m in cash to shareholders through share buy-backs and special dividends. It is not the only one. Fletcher Building received $68m in wage subsidy cash during 2020 and has refused to repay it, despite an increasingly robust profit and balance sheet. It paid $140m of cash dividends to shareholders in April this year after reporting solid profit growth and a strong outlook because of a boom in house building and building materials sales. NZME and Fletcher Building are just two among many large and small New Zealand companies that have refused to repay the cash, despite reporting profit growth and higher cash reserves.

‘Media is under threat. Help save The Spinoff with an ongoing commitment to support our work.’
Duncan Greive
— Founder

Overall, the government gave $20bn in cash to companies during 2020 and 2021 as wage subsidies, but less than $1bn has been returned, which companies were supposed to do if they found they did not need it. Meanwhile, company profits have surged over the last two years, despite a sharp rise in costs and wages because of inflation. Those higher profits are due at least partly to the cash windfalls from Covid, and partly to profit margin expansion during the surge in inflation.

Stats NZ’s most recent annual enterprise survey for the year to June 30, 2021 found company profits rose by almost $25bn to $103bn from the previous (also) Covid-affected 2019/20 year, and were up from the last non-Covid year’s profit of $97bn. That came after government grants of $17.2bn in 2020/21 and $9.4bn in 2019/20, which followed $7.1bn in 2018/19. That is also before the second round of wage subsidies in the second half of calendar 2021 in response to the delta lockdowns from August onwards.

Profits up $25bn after $20bn of cash payments from government

More than 60% of the increase in profit in 2020/21 came from just three sectors: banking and insurance (up $10.6bn), rental and real estate (up $3.7bn), and construction (up $1.7bn).

The auditor general has criticised the government’s failure to properly chase up those who incorrectly kept the wage subsidy money. Prime minister Jacinda Ardern and finance minister Grant Robertson have repeatedly refused to call directly on companies to return the cash. The Ministry of Social Development  (MSD), the original distributor of the funds, has made a few prosecutions, but is spending more chasing and prosecuting beneficiaries to repay their $1bn in debt to MSD.

Then there are the unearned gains on assets

The other major interventions of the government during Covid were through the Reserve Bank, which removed loan-to-value ratio (LVR) restrictions, printed $55bn to buy government bonds to lower mortgage rates, and lent $12.7bn cheaply for banks to lend on to home buyers. Those moves were all approved by Robertson. The central bank’s deliberate aim was to make asset owners feel wealthier so they would spend, lend, invest and employ to soften the economic shock of Covid.

It worked, but it also delivered asset-owning households $621bn in increases in net worth to a total of $2.4 trillion between the end of December 2019 and the end of the March quarter of 2022, according to Stats NZ’s National Accounts data.

These accounts also show financial enterprises, which include banks and insurers, reported $6.6bn in gross disposable income (equivalent to pre-tax profit) in the two years to the end of March 2022, up from $5.5bn in the previous two years. Banks did not take the wage subsidies, but did benefit from cheap Reserve Bank loans and the removal of LVR restriction in 2020. This same data shows non-financial businesses made gross disposable income of $114.1bn in that two-year period, up from $74.4bn in the previous two years. This data also shows the equity held by non-financial businesses rose by $203bn to $1.275tn in the two years to the end of March.

So Covid policies helped increase the net worth and equity of households and businesses by $824bn in 2020 and 2021 ($621bn for households and $203bn for businesses), including $378bn from the rise in residential land and house values to $1.31tn, caused largely by lower interest rates.

How to refund the Covid windfalls

There are various ways the Covid support could be refunded to taxpayers at large by business and homeowners, including simply repaying the bulk of the $20bn in cash support for businesses. It would require direct requests for repayment from the government, which we have yet to see. CTU economist Craig Renney has also suggested a windfall tax on bank profits, which are currently running at an annual rate of $6.8bn per year, and reflect the big surge in mortgage lending done through the last two years of Covid and cheap funding from the taxpayer-owned Reserve Bank.

The refunds of unearned Covid gains could also be done through a one-off 0.2% tax on the value of all residential-zoned land, which would raise around $20bn.

That combined $40bn of windfall refunds to the government could be used to both increase incomes for the lowest paid and reduce government debt, or alternatively, to invest in infrastructure to allow much greater supply of affordable housing.

I think a debate about the wealthiest returning their near-$1tn in windfall gains from Covid policies is more useful than debating whether $20,000 of public funding for a documentary on a public scientist can be justified, especially when the debater’s employer received $12.9m of taxpayer cash and is paying it all back in cash dividends to its fund-manager owners.


Follow Bernard Hickey’s When the Facts Change on Apple Podcasts, Spotify or your favourite podcast provider.


Bernard Hickey’s writing here is supported by thousands of individual subscribers to The Kākā, his subscription email newsletter and podcast. You can support his writing by subscribing, for free or as a paid subscriber. 

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