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Fonterra's Regulation Concerns

16 November 2012

NEW ZEALAND - Fonterra welcomes Government changes to the Raw Milk Regulations which answers most of their concerns about regulated milk.

Early this year the Government asked for submissions on the Dairy Industry Restructuring (Raw Milk) Amendment Regulations 2012, and today released them in their final form.

Fonterra Chairman-elect John Wilson said the Co-operative and farmer shareholders have consistently. “The new Regulations address one of our key concerns by requiring that Independent Processors must take some milk during peak production months, under what’s commonly called the ‘October Rule’.

“We are pleased that the Government has responded to our concern around the seasonal profile of milk production and the need for the regulations to reflect that reality. The retention of an obligation for Independent Processors to take a minimum amount of their milk in peak months, together with a new system of monthly maximum limits on milk take, is a good step forward," added Mr Wilson.

The Government’s July amendment to the Dairy Industry Restructuring Act clarified the rules around who can claim to be an Independent Processor under the Raw Milk Regulations.

Mr Wilson is positive about recent Government steps, saying the adaptation made to the Act offers security: “This amendment was aimed at eliminating the potential for ‘gaming’ of the regulations by ‘virtual’ processors that are like shell companies with no visible presence or investment in physical assets. We trust that the Government will act swiftly if any ‘gaming’ behaviour occurs in the future to undermine the purpose of these Regulations.

“The Regulations preserve two principles that are important to the Co-operative and the wider dairy sector. They will promote competition at the farmgate, and ensure that sufficient regulated milk is available for dairy food and beverage companies who process raw milk but do not have their own supply.” said Mr Wilson.

TheCattleSite News Desk

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