The Ministry for Primary Industries (MPI) released a discussion
document in November 2018 on the review of the Dairy Industry
Restructuring Act 2001 (DIRA). DIRA regulates
Fonterra's role in the New Zealand dairy industry. It provides
for the ability of farmers to enter and exit supply arrangements
with Fonterra and for oversight by the Commerce Commission of its
milk price setting process. DIRA was due to expire in the South
Island at the end of May but was extended under an amendment bill
passed earlier this year while the review takes place.
Originally intended to apply only as long as Fonterra's
dominance of the New Zealand dairy market made it necessary, DIRA
obliged Fonterra to accept milk supply from all farmers who offered
it. Fonterra says that obligation impacts on its capital investment
options and slows its ability to invest in new product development.
The review will look at the open entry and exit obligations and
whether Fonterra should continue to be
