Dairy industry restructuring bill tabled

Press Release – New Zealand Government

A new bill detailing proposals to oversee Fonterra’s farm gate milk price setting and ensure a more transparent and efficient dairy market was tabled in Parliament today by Primary Industries Minister David Carter.Hon David Carter
Minister for Primary Industries

27 March 2012
Media Statement
Dairy industry restructuring bill tabled

A new bill detailing proposals to oversee Fonterra’s farm gate milk price setting and ensure a more transparent and efficient dairy market was tabled in Parliament today by Primary Industries Minister David Carter.

“Because of Fonterra’s dominance in the New Zealand market, the price it pays its farmers for milk at the farm gate effectively becomes the default price that all dairy processors must pay to attract supply from farmers,” said Mr Carter.

“The Dairy Industry Restructuring Amendment Bill will oversee how Fonterra sets the price it pays its farmers, thereby ensuring a competitive and innovative dairy industry.

“The proposed regime will give confidence that the aim of the Dairy Industry Restructuring Act – to drive efficiency in the dairy industry through contestable milk supply – is being met.”

Mr Carter said the Bill will primarily embed Fonterra’s current milk price governance amendments in legislation, require Fonterra to publicly disclose information on its milk price setting and introduce an annual milk price monitoring regime to be undertaken by the Commerce Commission.

The Bill also includes changes that enable Fonterra to move to its proposed Trading Among Farmers (TAF) system, should it choose to.

Mr Carter said potential changes to the Raw Milk Regulations are still being considered and an announcement on these is expected shortly.

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ENDS

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