[18 February /Radio NZ]

Fonterra Co-operative Group have called for changes to made to the Dairy Industry Restructuring Act (DIRA) and for rules introduced when the co-operative was formed in 2001 to stop the company exploiting its market dominance for its own benefit to be removed or relaxed. The co-op’s submission calls for the largest structural change in the dairy industry for almost two decades. Fonterra noted in its submission that dairy exports had tripled and competing companies had multiplied since the co-operative began, meaning the anti-market dominance rules are no longer needed. One of the rules imposed meant that Fonterra must buy milk from any farmer that wanted to sell it, and the co-op claims that this has limited its ability to invest in targeted and value added product as well as compelling the company to buy from farmers whose environmental standards fell short of what the community expects. The co-operative called for this rule to be removed in first instance, or simply reduced as a second option. Fonterra asked for other companies to be required to also have their milk price overseen by the Commerce Commission in order to increase transparency through the industry. The co-op also requested rules stating it must sell milk at cost to large export-focused dairy companies to be reconsidered as it has to compete with them on the world market. A final report on changes to DIRA and subsequent legislation are both expected this year.