Friday, 16 February 2018 11:30

DIRA review on the cards

Written by 
Minister of Agriculture Damien O’Connor. Minister of Agriculture Damien O’Connor.

Provisions to manage Fonterra’s dominant position in New Zealand’s dairy markets will not expire at the end of May.

Parliament has passed a law change so that the efficiency and contestability provisions of the Dairy Industry Restructuring Act 2001 (DIRA) will be retained.

Minister of Agriculture Damien O’Connor says the Government will now undertake a comprehensive review of the DIRA and consult fully with the dairy sector.

O’Connor says the review will consider key issues facing the dairy industry, including, for example, environmental impact, land use, Fonterra’s obligation to collect milk, and how to achieve the best outcomes for farmers, consumers and the New Zealand economy.

Details on timing, delivery and definitive scope will be considered by Cabinet in the coming weeks.

“It was not in the interest of farmers, dairy processors, consumers, or the wider New Zealand economy to let these key DIRA provisions expire in the South Island and tinkering with the Act would not answer some of the bigger questions facing the industry.

“By rolling over the Act and committing ourselves to a wide-ranging review we are taking a considered and strategic approach to the changing needs of the dairy industry.’’

A report from the Commerce Commission, published in 2016, found that competition was not yet sufficient to warrant the removal of the DIRA provisions. This Government is satisfied that it is appropriate to retain the existing provisions while the review is conducted. 

“Officials are currently working on the terms of reference for the review, and I intend to share these with the New Zealand public and the dairy industry in the first half of this year,” says O’Connor.

The DIRA was passed in 2001 to manage Fonterra’s dominant position in dairy markets, until sufficient competition emerged. Its automatic expiry provisions were triggered in 2015, when other dairy processors collected more than 20% of milksolids in the South Island.

More like this

Featured

NZ Tractor Sales Up 10.7% in First Half of 2026: TAMA

As we move into the second half of 2026, the Tractor and Machinery Association (TAMA) reports that Year-to-Date figures ending June 30 saw new tractor deliveries hitting 1,386 units or 10.7% ahead of the same period in 2025.

National

Machinery & Products

» Latest Print Issues Online

Milking It

Irish Dilemma

OPINION: The Irish dairy sector is facing a new dilemma - maintaining year-round fresh milk supplies.

Beef Cows To The Rescue

OPINION: Could beef cows play an increasingly important role in improving profitability and resilience on hill country farms?

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter