The proposal document is in response to the Commerce Commission report on competition in NZ’s dairy industry which was released on 1 March 2016.

The Minister said “after considering this report I am releasing a discussion document on options to amend certain provisions of the DIRA and transition towards deregulation.”

The most contentious provision in the Act, at which Fonterra feels most aggrieved, the directive that Fonterra must provide milk to its competitors at cost price, is going to be addressed.

Feedback is sought on the following provisions,

  • Amending the DIRA raw milk regulation 2012 so that Fonterra no longer needs to sell milk at a regulated price to large, export focussed processors and the volumes of regulated milk available to all other processors are gradually reduced.
  • Amending the open entry provisions so that Fonterra no longer has to collect milk from new dairy conversions.
  • Amending the sunset provisions so that the next Commerce Commission review occurs in five years time or if independent processors achieve a 25% market share in the North or South Island.

    • As the industry progresses toward deregulation, this review progressively builds on changes made in 2012. As it stands, five large independent processors will no longer eligible for DIRA milk from June this year.

    The Minister urged all interested parties to respond before the closing date of 29 June 2016 and this will be followed by public meetings.