A review of the Raw milk regulations is sensible 10 years on from the formation of mega dairy processor Fonterra.
While the goal to allow competion in the market when Fonterra was formed was laudable then, it does seem strange that Fonterra shareholders now, are producing many litres of milk, for their competitors.
Not only are they supplying milk, but companies are recieving it in the shoulders of the season, times when demand is at a peak.
May Wangs new company in Tauranga set up to export long-life milk to China is to receive up to 220,00 litres of milk from Fonterra.
Fonterra's market share once in the 90's has reduced substantially since it was evolved, and the Minister will have to decide what level of competition is fair in the market.
Agriculture Minister David Carter today announced that the Government will undertake a full review of the Raw Milk Regulations in March 2011.The Raw Milk Regulations form a key part of the Dairy Industry Restructuring Act (DIRA). "The Government's goal is to promote a vibrant and innovative dairy sector for the benefit of dairy farmers, consumers of dairy products, and the NZ economy," says Mr Carter in Voxy.
"The Raw Milk Regulations are a key tool to achieve that goal. "However, during the recent review of the DIRA, submitters raised concerns about the eligibility criteria for access by independent processors. "The Government shares some of these concerns and will consider them fully in a broader review of the regulations.
"It has been 10 years since the DIRA was introduced and over this time the dairy industry has evolved significantly. It is now appropriate to review the Raw Milk Regulations to ensure that they remain fit for purpose. "This is likely to consider more than just the eligibility criteria and include the whole range of provisions under the regulations.
"All interested parties will get to have a say as part of the consultation process."While this review is a priority for the Government, our primary focus remains on working with Fonterra on its capital structure changes," Mr Carter says.
2 Comments
Uncle Henry met with Carter last week. Carter seems to have been pulled in to line regarding the eligibility criteria review. However, as a Fonterra supplier, if this review is to be credible it will be completed in time for the changes to take place for the beginning of the 2011/2012 season. Any talk of the review starting in March but any changes probably wont be implemented until after 2011/2012 is simply stalling. If it isn't sorted and implemented before the election, National will pay the price on election day.
You are possibly right about National paying on election day. NZ has 4+ million consumers of dairy products, and Fonterra less than 11,000 shareholders.
I suspect much money will have to be spent on marketing or there is a danger close examination of DIRA will reveal more than Fonterra wants.
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