Fonterra welcomes government move on raw milk regulations

Fonterra today welcomed the Government's announcement confirming changes to the Raw Milk Regulations in New Zealand, which set the basis for the price of milk other processors can access from Fonterra under DIRA (Dairy Industry Restructuring Act).



Chairman, Sir Henry van der Heyden, said the new basis for the regulated milk price – Fonterra's Milk Price plus 10cents/kgMS – would "remove some of the benefits other processors have had and create more of a level playing field".



"Other processors will still get access to DIRA milk but they will pay a fairer price that reflects what that milk is worth at the farm gate, and what we pay our farmers for it," Sir Henry said.



Sir Henry said the issue had been of concern to Fonterra farmers for some time, because of the subsidy it gave other companies to compete with Fonterra in export markets. He said the response from Government, based on a MAF study of the market for milk, was both fairer and in line with the principles envisaged when Fonterra was formed in 2001.