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Copeland continues call for milk price enquiry

Gordon Copeland Press Release
For Immediate Release
Tuesday, 29th April 2008

Copeland continues call for Government Enquiry into milk prices

Independent MP Gordon Copeland, the Kiwi Party’s spokesperson on Commerce, today renewed his call for an Enquiry into milk prices.

“I have received a response from the Chair of the Commerce Commission saying that unfortunately they cannot undertake such an enquiry since it is outside of their purview,” said Mr Copeland.

“The Commission say that although they have a policing role under the Dairy Industry Restructuring Act 2001 and the Raw Milk Regulations to counteract anti-competitive effects, it is not their role to regulate the final price of milk.”

“However, they point out that under the Commerce Act the Minister of Commerce could direct the Commission to impose price control if she is satisfied that there are competition concerns in relation to milk pricing.”

“Notwithstanding, the Commission have indicated that they will continue with some preliminary enquiries and gather further information in relation to this issue.”

“The Commerce Commission’s response does not let the Government off the hook. Rather continuing consumer concern about the price of milk in New Zealand now demands action by the Government itself.

“My central concerns remain.”

“Two litres of milk in NZ continues to cost $3.35 (although the actual prices charged at my local supermarket are as much as $5.50, depending on whether Calci-Trim and other options are chosen) which reduces to $3.05, net of GST. As I have previously pointed out, that price is actually higher than the price of milk in the UK, the USA, and Canada. That is one set of realities.”

“In addition, I remain unconvinced that the price of milk in NZ has to be based on and follow the international price of dairy products. The NZ price needs only to cover the return to the farmer, processing costs, distribution costs and the wholesale/retail margins.”

“To argue that the price here needs to follow international market conditions would be like the Saudi Arabian Government arguing that the price of petrol in that country needs to be equal to its international price. However whilst we are paying near $2 per litre for petrol (which includes heavy Government levies and GST etc), the Saud’s pay just 16 cents! In a similar way, the price of milk in NZ should be de-coupled from international prices. After all we are a milk producing and dairy products exporting nation."

“In my view, continuing government inaction cannot be justified.


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