Fonterra gets the raw deal it wanted

18:30, Nov 14 2012

Long-awaited changes tightening the rules over when and how much raw milk dairy giant Fonterra must sell to independent competitors have been announced by the Government.

The changes to the Raw Milk Regulations follow a major review by the Primary Industries Ministry and are largely what the $12 billion industry expected.

But Federated Farmers said it had hoped the Government would have done more to drive independents direct to farmers for their milk instead of to Fonterra.

The federation was also unhappy that the amount of milk in the bucket Fonterra is obliged to offer has been hefted by 195 million litres for next season to 795 million litres.

The key amendments include the introduction of a three-season time limit under which large independent processors with their own milk supply from farmers can call on Fonterra to sell them regulated milk; the total quantity of milk available from Fonterra being set at around 5 per cent of its total milk supply; and a range of maximum quantities processors can order from Fonterra at different months of the season, to reflect the seasonal demands of milk production.

Another key change is that processors which do not take much, or any, milk directly from farmers will be able to pay a fixed price for regulated milk and not be subject to a "wash up" price at the end of the season.

The new regulations take effect from June 1 next year.

Fonterra controls nearly 90 per cent of the country's raw milk supply. Fairfax NZ


Taranaki Daily News