Fonterra has responded to the Government’s proposal to regulate raw milk supplies in New Zealand as a “backward step” that will only benefit foreigners and neither New Zealand dairy farmers nor local consumers.
In a statement released to the media yesterday (24th Jan.) Fonterra claims that most of the independent processors sourcing milk from Fonterra are doing so to supply overseas markets. By forcing a lower price to these processors regulators are in effect aiding New Zealand dairy farmers’ direct competition.
According to the release, Fonterra chief executive Theo Spierings says: “Handcuffing us at home will weaken our ability to compete and win overseas. It doesn’t make sense to penalise New Zealand’s home grown cooperative at a time it is bringing in more than a quarter of the nation’s export earnings.
“Shortly after joining the co-op last year I signalled that I wanted to take a fresh look at milk pricing in New Zealand and find ways to provide more affordable milk for New Zealanders, in the face of continuing high international prices.
“Our efforts to make milk more accessible and affordable are already showing results. Late last year we announced the Milk for Schools programme intended to provide free milk every day to every primary school child in New Zealand commencing in early 2013, and further efforts are already in train to remove costs from the supply chain for milk for New Zealand.
“Fonterra is competing fiercely in international markets against tough, foreign competition. It makes no sense to hit it with $200 million in extra costs with regulations that have no benefit for New Zealand consumers,” Spierings says.
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