Published on the 25/09/2014 | Written by Newsdesk

New website frontup.co.nz sets out to find out why New Zealanders are being charged more than our international peers for the same products, and the reasons seem similar to those causing the ‘Australia Tax’ across the ditch…

In July this year an Australian parliamentary commission released its report on IT price disparities confirming that Australians are being charged 50 percent more than their counterparts in the US. Now, New Zealand-owned ISP Slingshot is backing an attempt to demonstrate a similar trend across a multitude of product categories in New Zealand by exposing them on frontup.co.nz.

Over the last month a team of independent journalists has been populating the website has been highlighting international disparities in product pricing for well-known brands, including Apple, Nike, Dyson, Fonterra and Steinlager.

The companies have all been offered the right of reply but, according to Front Up, “of the almost 30 products and services reviewed in the past three weeks on the website, the majority of companies targeted have not yet taken the opportunity of a right of reply”. At the time of writing only Samsung, New Zealand Beef and Lamb, Toyota, Lion/Steinlager, Dyson’s New Zealand distributor, Proctor & Gamble, Whitcoulls and Slingshot had “fronted up”.

Slingshot general manager Taryn Hamilton says it’s clear from the hundreds of comments and responses on the Front Up Facebook page that consumers want answers about why they are paying so much.

“It’s just a shame most businesses couldn’t be bothered to respond, or seemingly don’t care about the high prices consumers are paying for their products.

“But probably the biggest reason these companies don’t want to front up is because there is no excuse for the higher prices New Zealanders pay compared to people overseas.”

Those companies that did respond cited market conditions, higher overheads, legal fees, tax and, in the case of New Zealand exporters, a lack of control over retail pricing in the destination markets. Toyota’s added that, “every manufacturer faces relatively high overheads in the New Zealand market due to the lower volumes sold”.

When it comes to imports, a price difference may be justified, but in many cases, such as software, music or home-grown products like milk, beef and lamb, the price disparity is baffling. Front Up singled out the price of milk as having one of the most startling cost differentials, with Fonterra’s Dairy Dale brand costing $1.70 per litre. In US a litre of milk costs the equivalent of NZ$1.20 and in Britain NZ$0.86. This is after taking into consideration our GST and exchange rate differences.

Other examples of sky high New Zealand prices from the Front Up site include:

• Nikes – $220 in New Zealand, equivalent of $NZ131 in the US
• Sunglasses – $274.90 in New Zealand, equivalent of $NZ185.00 in the US
• iTunes – New Zealanders pay 35 percent more for same music as Americans
• Lipstick – $19.99 at Warehouse, equivalent of $NZ6.65 in the US

As found with the case of Australian IT products, it looks very much like, for the most part prices are high because of vendors’ regional pricing strategies and an approach which sees them charging “what the market will bear”. While the government cannot force companies to change their pricing strategy, Hamilton said consumers should continue to make companies more accountable and send the message that it will not be tolerated. He suggested buying direct, importing goods from overseas, as well as contacting retailers and importers, local MPs, and Consumer Affairs Minister, Craig Foss, to complain.

“People don’t need to take the sticker price of an item as being what they have to pay. Everything is negotiable. Haggle and barter with retailers because they would rather have a lesser margin than not have a sale at all.”