November 19, 2012

 
Fonterra positive about changes to Raw Milk Regulation

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

Fonterra Chairman-elect John Wilson said the Co-operative and farmer shareholders have consistently said the Raw Milk Regulations needed an overhaul for the good of the dairy sector and New Zealand.

"From Fonterra's perspective, the new Regulations address one of our key concerns by requiring that Independent Processors must take at least 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.

The Government's July amendment to the Dairy Industry Restructuring Act clarified the rules around the requirements for an Independent Processor under the Raw Milk Regulations. 

"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, and for start-ups that genuinely need it," said Mr Wilson.