What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
Large processors who also buy milk directly from farmers will get a three-season limit for accessing regulated milk, the Government has decided.
Primary Industries Minister David Carter announced amendments to the Raw Milk Regulations, the rules by which independent milk processors can access raw milk from Fonterra.
The key amendments are:
• Large independent processors who collect a significant quantity of milk directly from farmers will have a three-season limit for accessing regulated milk;
• The total quantity of milk available under the Raw Milk Regulations will be set at approximately 5% of Fonterra's milk supply, as provided for in the legislation;
• A range of maximum quantities will apply to processors accessing milk under the Raw Milk Regulations in different months of the season to reflect the seasonal nature of milk production;
• Processors who do not take much, or any milk, directly from farmers will be able to pay a fixed price for milk accessed under the Raw Milk Regulations and will not be subject to the "wash-up" process at the end of the season.
"The regulations ensure dairy processors can access raw milk when they are starting up and aim to support competition in domestic dairy products," Carter says.
"The changes follow an extensive consultation and review process on how best to achieve a fair and efficient dairy market in New Zealand."
Carter says the new regulations will take effect on the first day of the next dairy season, from June 1, 2013.
