Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Fonterra Regulatory Package Still Flawed

Fonterra Regulatory Package Still Flawed

Tuesday, September 11 2001 Stephen Franks Press Releases -- Commerce


ACT Commerce Spokesman Stephen Franks says Parliament's Primary Industry Select Committee has failed to repair flaws in the regulatory package overseeing operation of the new monopoly dairy company Fonterra.

The Dairy Industry Reform Bill was reported back to Parliament today.

"There are still risks for New Zealand dairy farmers in putting all their eggs in one basket.

"The regulatory package is supposed to protect New Zealand farmers, and other manufacturers and exporters from Fonterra's monopoly position. However there is still nothing in the Bill that requires Fonterra to adhere to fair value entry and exit.

"Officials before the Select Committee stated that Fonterra would have strong commercial pressures not to set entry and exit prices above or below fair value. The only evidence in support of this was provided by a consultant to officials. Other submissions, including from New Zealand Dairy Food, warned of the risks to competition through the misuse by Fonterra of its ability to depart from a fair intrinsic value for the shares.

"In the result the Committee recommends that the definition in the Bill link exit and entry values to fair value as defined in the constitution from time to time. This at least requires adherence to the constitution, presently in the form advised to farmers when they voted on the merger proposal. But It does not prevent distortions from quirks in the valuers instructions or the definition of the terms in the constitution, and nor does it stop a 75% shareholder vote from changing the constitution, even reverting to a nominal value share.

"ACT promoted an amendment which would have at least assured farmer shareholders who voted against any such change to the fair value formula, a right to exit on the basis set out in the merger proposal. The majority did not support this proposal.

"ACT is also concerned that for the sake of obtaining a domestic monopoly Fonterra has agreed to features that undermine the potential robustness of its co-operative status. ACT considers that farmer co-operatives in a competitive deregulated industry should have been free from the risk of having to fund fair value exit, and free to agree comprehensive long term contracts with supplier members. When the decision was made to approve a monopoly, without Commerce Commission scrutiny, the die was cast. Fair value open entry and exit and the consequent panoply of regulations became inevitable to protect farmers, other manufacturers, New Zealand consumers, and Fonterra itself from abuse of its monopoly powers, including the strangle hold it would otherwise get on information," Stephen Franks said.

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Crowdsale And Crowdfunding Campaign: Help Create The Future Of Independent News

Two weeks to go! The Scoop 3.0 plan aims to create NZ’s first community-owned, distributed news and media intelligence ecosystem in 2019. We believe this ScoopPro media monetisation approach can be scaled and spread globally to support local and independent news efforts in regional New Zealand and around the world.

Scoop is an ecosystem, it would not exist without those who contribute to it, read it and rely on it for professional media purposes. Generous past support from this ecosystem has enabled us to come this far in developing our business model. Support our PledgeMe Campaign>>

 

14/11: Two Years’ Progress Since The Kaikoura Earthquake

Mayor John Leggett said it was a day for reflection, but also a time to recognise the work by many people to support progress towards recovery made across Marlborough since November 2016. More>>

ALSO:

Pike River: Mine Drift Re-Entry Plan To Proceed

“I’ve decided the Te Kāhui Whakamana Rua Tekau Mā Iwa - Pike River Recovery Agency, recommended course of action to enter the drift, using the existing access tunnel, is by far the safest option,” said Andrew Little. More>>

ALSO:

Appointments: New High Commissioner To Australia Announced

“Dame Annette King needs no introduction given her long running career as a parliamentarian where she has previously held a number senior Cabinet portfolios, including Justice, Police and Health. She also was Parliament’s longest serving female MP with 30 years’ service,” said Mr Peters. More>>

ALSO:

Two Years Since Kaikoura: Silvia Cartwright To Lead Inquiry Into EQC

“The inquiry will be the first of its kind under the Public Inquiries Act 2013 and will have all the powers of a Royal Commission, be independent of Government and make its report directly to the Governor-General. More>>

ALSO:

Gordon Campbell: On The Royal Commission Into Child Abuse

Obviously, it is good news that the coalition government has broadened the scope of its Royal Commission into the abuse of children, beyond its previous focus on children in state care. More>>

ALSO:

Cases Delayed: Court Staff Refuse To Handle Sentencing Papers

Dozens of court cases have reportedly been delayed, as court staff escalate industrial action at two Auckland courts by enforcing a ban on handling sentencing papers. More>>

ALSO:

Education: Primary Teachers Rolling Strikes

RNZ Report: More than 100,000 primary school students in Auckland will be home from school today as teachers and principals walk off the job for the second time this year. It's the start of a week of rolling one-day strikes around the country, after the collapse of contract negotiations last Thursday. More>>

ALSO:

"Process Was Sound": Inquiry Into Haumaha Appointment Released

The Inquiry’s purpose was to examine, identify, and report on the adequacy of the process that led to the appointment. It found the process was sound and no available relevant information was omitted. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels