16 July 1999
NZ to deregulate dairy industry
THE New Zealand government is pushing legislation through to deregulate the countrys dairy industry and allow a single, large co-operative company to be formed.
The new company, dubbed MegaCo-op by farmers, will combine most of the countrys co-operatively owned processing companies and their marketing arm, the New Zealand Dairy Board.
Its formation is being driven by a concern to create an entity with a global reach. It would have exclusive access to the countries and regions that set quotas on imports of dairy products – the European Union, the USA, Japan and Canada – for six and a half years. Those rights would then be phased out over four years.
The industry has agreed to open the domestic market to competition. It will set up and later sell a company with a strong brand that will be able to process 40% of town milk supply in order to satisfy Commerce Commission concerns about market dominance.
Approval for MegaCo-op still depends on approval by the Commerce Commission, a 75% vote in favour by dairy farmers and a successful merger of the two biggest companies, Kiwi and New Zealand Dairy Group.
- Dairy mega-co-op delays cost New Zealand US$400,000 a day, FWi Australia, 21 June, 1999
- Financial Times 16/07/99 page 36