New Zealand butter and French butter are substitutes. When one substitute increases in price, consumers will buy less of the now-relatively-more-expensive substitute (New Zealand butter), and more of the now-relatively-less-expensive substitute (French butter). Simple, yes. Headline stuff, not even on a slow news day.
Are we New Zealand butter consumers supposed to rise up against the oppression of New Zealand butter sellers as a result of this article? You know what? The dairy companies selling New Zealand butter don't care. They're receiving a higher price for selling their butter on the world market. If New Zealand consumers want to buy French butter instead because it's cheaper, then that's fine by the dairy companies.
The article does leave one mystery open though, when it explains why New Zealand butter has increased in price:
According to ASB economist Nathan Penny, demand for butter skyrocketed worldwide after scientists debunked the link between animal fats and heart disease.That makes sense. When consumers preferences shift towards a good (like butter), then demand increases, and the equilibrium price increase. What makes less sense is, why hasn't the increase in global demand for butter led to an increase in the price of French butter as well?