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


Fonterra has copped a fair bit of stick from the Hound over the years. However, on this occasionyour old mate would like to give the dairy co-op some well-deserved praise.

Tip Top sale no sweet fix

Selling the iconic ice cream business Tip Top won’t end Fonterra’s financial woes, says broker Grant Williamson, of Hamilton Hindin Greene.

Fonterra to support farmers meet target

Fonterra says the Government's new methane target is very ambitious and will need hefty spending on R&D to give farmers the solutions they need to achieve.


» The RNG Weather Report

» Latest Print Issues Online

Milking It

MooFree May

UK activists have resumed their attack on the dairy industry.

Fresh is best

The shelf life of fresh milk can be extended up to two months by a technology developed by an Australian…


» Connect with Dairy News