Acting Agriculture Minister Michael Cullen said today that the Government was disappointed at the Dairy Industry Establishment Board’s (DIEB) statement that it will be wound up with immediate effect.

The decision follows the failure of the New Zealand Dairy Group and Kiwi Dairies to agree merger terms by today’s self imposed deadline.

“We won’t finally know if the merger is on or off until the companies themselves make that announcement. But today’s developments make it look increasingly unlikely,” said Dr Cullen.

“The Government, like dairy farmers, is frustrated at the protracted merger process.

“We are concerned that this ongoing uncertainty may be threatening the future of one of our most important sectors.

“Legislation to enable the merger is there and will remain until 1 September 2000.

“If the companies can reach agreement and gain the support of dairy farmers and the Commerce Commission then the merger will proceed. It’s all in the hands of the dairy companies,” said Dr Cullen.

"I have no further comment to make on this issue until at least Monday when I have been fully briefed."

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