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Draft report on dairy competition released

Hon Nathan Guy
Minister for Primary Industries

Hon Paul Goldsmith
Minister for Commerce and Consumer Affairs

6 November 2015 Media Statement


Draft report on dairy competition released

Primary Industries Minister Nathan Guy and Commerce and Consumer Affairs Minister Paul Goldsmith have welcomed the Commerce Commission’s release of a draft report on the state of competition in New Zealand’s dairy industry today.

The report was commissioned by the two Ministers on 2 June 2015 as required under the Dairy Industry Restructuring Act 2001. That Act allowed the formation of Fonterra, and includes provisions to promote contestability in New Zealand’s farm gate and factory gate dairy markets to ensure their efficient operation.

“The Commerce Commission has formed an independent view based on its expertise as New Zealand’s primary competition regulatory agency. On balance, the draft report has found that competition is not sufficient to warrant deregulation at this point,” says Mr Guy.

Submissions on this draft report are open until 4 December 2015. Following a period for cross-submissions, the final report will be released by 1 March 2016.

“I intend to consult on a package of policy proposals in mid-2016, following receipt of the Commerce Commission’s final report.

“The dairy industry is a major part of our economy and this process will be helpful in assessing whether the Act is effectively promoting contestability, and in turn, the efficient operation of our domestic raw milk markets.”

“I would like to thank the Commerce Commission for their work to date, and I encourage all those with an interest in this area to consider the Commissions draft report carefully, and to make a submission if necessary,” Mr Goldsmith says.

The final report will help inform the Government’s policy decisions, in particular, whether or not to allow the default expiry of the pro-competition provisions of the Act in the South Island (the current expiry threshold was met in the South Island in the 2014/15 season).

Information about the report process, including how to make a submissions on the draft report, is available on the Commerce Commission website:

http://comcom.govt.nz/regulated-industries/dairy-industry/report-on-the-state-of-competition-in-the-new-zealand-dairy-industry/

Information about the Dairy Industry Restructuring Act and review process is available on the Ministry for Primary Industries website:

http://www.mpi.govt.nz/law-and-policy/legal-overviews/primary-production/dairy-industry-restructuring-act/

ends

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