Tuesday, 04 August 2020 09:04

Miraka unhappy with rushed DIRA changes

Written by  Peter Burke
Miraka says it s all about competition for independent dairy companies. Miraka says it s all about competition for independent dairy companies.

Miraka chief executive, Richard Wyeth says the company was disappointed at the way the Dairy Industry Restructuring Act Bill (DIRA) was rushed through Parliament recently.

One key aspect of the bill is that it removes the obligation of Fonterra to accept applications for farmers to automatically become shareholders. 

For dairy companies such as Taupo-based Miraka, this could mean that if a Fonterra supplier moved to Miraka and then later wanted to go back to Fonterra, there is no obligation on the part of the cooperative to accept them back.

Wyeth says they wanted to have more consultation on the process and were disappointed that it was “rushed” through Parliament prior to the election. He says the issue is around competition, not specifically for Miraka, but for all independent dairy companies.

Wyeth says, for Miraka, competition means open entry and exit. He says the way the new legislation is framed, there is a concern that Fonterra can exercise its dominant market position.“There is a significant amount of trust now being placed on Fonterra to do the right thing and government have said that themselves. With this new bill, the power now sits with Fonterra whereas in the past it used to sit with the legislation.”

Wyeth says most Miraka suppliers probably weren’t aware of the legislation going through and in the meantime it won’t have any direct impact on them. 

He says just before the legislation was passed, he had a meeting with Minister for Primary Industries Damien O’Connor in a last ditch attempt to get changes made to the bill.

“But this was too late and it was in effect a fait accompli because there was bipartisan support through the house, so it wasn’t going to change. Different parties had different reasons for supporting the bill. For example, the Green Party were quite comfortable because they thought there would be no more conversions, which I can understand,” he says.

But Wyeth says, despite this, Miraka felt these views could have could have been accommodated without enacting the new law.

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