Westland wants level playing field

Presenting Westland's submission to the primary production select committee, Quin emphasised the need for a level playing field which allowed for genuine competition.

"We see in the bill some aspects which favour Fonterra over other industry processors and we want to see a level playing field."

Quin says Westland, in common with the IDPG, wants the milk price setting done off 'actuals'.

"By that we mean actual product mix, actual prices and actual operating costs. We've seen arguments from Fonterra saying it's driven mainly off prices. I accept they are using actual prices – they are not using actual product mix and they are not using operating costs. It's a very theoretical model they have designed and are implementing but that's not a healthy outcome from our perspective."

Quin submitted that Fonterra's dominance has necessitated DIRA and is reflected in its 'purpose statement'. "But to date DIRA has failed to regulate Fonterra's activities effectively and further direct intervention is required to support the development of a competitive market for farmers milk. The bill must not permit the setting of a base milk price by Fonterra using an 'optimised model' which produces a higher milk price than Fonterra's actual performance. Instead what is required is a base milk price that reflects their actual performance."

Quin posed a question to the Government members on the committee, asking them just what they wanted – one large dominant player or genuine farmgate competition.

"We have struggled with some of the comments in the amendment bill to see what the Government is actually after here. Some parts of the bill appear to give Fonterra a competitive advantage and we are concerned about that.

"It's not a case of Westland saying it wants Fonterra weakened; all we want is a level playing field."