Dairy Reform Objectives Still Valid

  • Bill Birch

Hon Bill English

Hon John Luxton
Minister for Food, Fibre, Biosecurity and Border Control

Rt Hon Sir William Birch
Minister of Finance

Hon Max Bradford
Minister for Enterprise and Commerce

Working with the Commerce Commission to get approval for the Mega Co-op remains the responsibility of the dairy industry and its leaders, Government Ministers said today.

They were commenting following the release by the Commerce Commission of its draft determination on the application by the dairy industry for authorisation to a merger of the Dairy Board and the co-operative dairy companies.

"The overall objectives of the dairy industry reforms are not affected by this decision.

"The strategy planned by the dairy industry and supported by the Government is to position the industry better and on a more commercial basis to grow both its sales and its earnings, thereby improving the incomes of farmers and the wealth of rural communities.

"It is hugely important to New Zealand we make progress on these issues.

"However, there are four separate and significant hurdles to be overcome before the dairy industry reforms can be implemented. These are:

· passing of the Dairy Industry Restructuring Bill;
· Commerce Commission approval to the formation of the mega co-op;
· agreement between the existing co-operative dairy companies on the terms of
the merger; and
· a 75% majority vote in support of the mega co-op by the farmer members of each of the merging co-operative dairy companies.

"Achieving the three latter steps is clearly the responsibility of the industry. The Government has made a commitment to having the Dairy Bill
passed. It is due to be reported back from select committee on Monday.

"There has always been the possibility that the draft determination of the Commerce Commission on the merger application would be unfavourable. In
discussions between dairy industry leaders and Ministers, it was accepted that it was the industry?s responsibility to work with the Commerce Commission to achieve a favourable decision."