Consumers appear to be missing the full benefits of tumbling dairy prices.
But no-one admits benefiting from the continued high prices.
A Fonterra spokesman said when costs were rising in the last 18 months, not all the increases were passed on to consumers.
"So it would be wrong to expect a massive correction in the market, as we never passed on the peak prices."
A 1kg block of cheese was about $2 cheaper than a year ago and a 500g pack of butter about $1 less.
"This softening of prices has largely occurred in the last two months," he said.
Foodstuffs chief executive Stephen Anderson said any changes in price from its suppliers were passed on.
Mr Anderson, whose company controls New World, Pak'N Save, Rite Price and Four Square supermarkets, said some prices had eased, but store prices were determined by what suppliers charged.
Any increase had to be justified and he said previously they were due to rising commodity, fuel and plastic prices.
All those prices have fallen since the middle of last year.
Fuel, which reached $2.19 a litre last July, was now below $1.35 a litre, and farmers have seen their milk payout slashed from $7.90 a kg of milk solids for last season, to a forecast this season of $6 a kg/ms.
There is speculation it could fall to closer to $5.50 a kg/ms as international dairy prices continue to plummet.
In the past month, the spot price for cheese on the Chicago Mercantile Exchange has fallen a further 37% and since July milk powder and casein have halved in price.
A source, who asked not to be named, said one issue was the use of contracted milk supply, which limited price changes until supply contract periods had lapsed.
Typically, dairy processors had quarterly or six-monthly milk supply contracts which worked in consumers' favour when prices were rising, but not when prices were falling.
Fonterra and Goodman Fielder dominate the New Zealand consumer dairy product market, and a Fonterra spokesman said retailers set the price according to what the market would pay.
Fonterra Brands NZ still had to clear cheese and butter stocks bought six to nine months ago, when the commodity price was double the historic average.
Goodman Fielder could not be reached for comment.
Federated Farmers dairy section chairman Lachlan McKenzie said consumers did not pay double the price for dairy products when milk prices doubled, which meant company margins were squeezed.
There was still room for retail prices to fall, but that could be delayed until supply contracts lapsed and new prices were negotiated, he said.
