Adjustment of 'Fonterra Act' on the way in New Zealand

The New Zealand government is preparing an evaluation of the Dairy Industry Restructuring Act (DIRA), also known as the Fonterra Act. This happens periodically, but after Fonterra's exit from consumer dairy and the sale of large parts to Lactalis, a new evaluation seems extra desirable. A decision will be made in mid 2027. Therefore, the ministry for primary industries (MPI) has already presented an 'issues paper' as preparation for the official evaluation. Stakeholders can use the matters mentioned in it to give their views for the review. The DIRA came into force in 2001 to ensure that Fonterra would not get a complete monopoly in New Zealand dairy. The cooperative company then collected 96% of all milk on the North Island and the South Island. By now that share has fallen to 77,5% and there are 5 other dairy companies active, all of which have found a place alongside Fonterra. One with more success than the other. At their start, these companies have been able to appeal to a part of Fonterra's milk supply in order to get going. The DIRA does not specify which milk price Fonterra must pay, but it does state the conditions that the milk price must meet, partly to guarantee that Fonterra does not misuse the milk price to stifle competitors. The law further determines that Fonterra must supply milk to retail in New Zealand, under which conditions. These provisions will probably also have to be revised now that Fonterra itself no longer has direct interests in consumer dairy, although through supply agreements it may still have an indirect interest. For example via Lactalis, which has bought the so-called Mainland Group from Fonterra. It appears that the DIRA legislation, which over the years has been relaxed more and more, may this time receive an even greater relaxation. Even so, Fonterra remains a dominant player in New Zealand dairy with more than three quarters of all milk supply in its hands, for which the government will still want to keep regulation in reserve.