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Different Milk Prices Divisive

Different milk prices within the Mega Co would create divisive tensions that could undermine dairy farmers' current and relatively fragile unity of purpose, DFNZ Chairman Charlie Pedersen said today.

"Any institutionalisation of price inequality could trigger the industry break-up that so many farmers fear," he said.

South Island West Coast farmers were recently told by industry leaders that the Mega Co needed the option of differentially pricing milk at the farm gate to reflect transport costs; land prices; or the presence of a competing processor.

"Most farmers DFNZ have talked to believe raising Mega Co prices locally to dissuade a new player is laughable. Some farmers hint a new pastime could be creating or inviting in new processors to boost the payout made to them by the Mega Co," Mr Pedersen stated.

"Similarly, different pricing for transport costs and varying land values, even if initially commercially justifiable, will be unnecessarily divisive and counter-productive long-term," Mr Pedersen concluded.


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