5 Jun 2014

US dairy takes aim at Fonterra

2:17 pm on 5 June 2014

A group of dairy companies in the United States has written to the country's trade representatives urging them to tackle what it says is Fonterra's unfair advantage during the Trans Pacific Partnership trade negotiations.

Companies aligned with the National Milk Producers Federation and the US Dairy Export Council wrote that the serious non-tariff policies of the New Zealand government have unfairly and uniquely given advantage to Fonterra.

They say these policies have allowed Fonterra to become the largest dairy exporting company in the world.

Fonterra milk truck.

A group of US dairy companies say Fonterra has an unfair advantage. Photo: RNZ

The companies also urged their trade representatives to take a harder line against Japan and Canada in the talks - they say Japan's attitude to market access is appalling.

New Zealand's agricultural trade envoy Mike Petersen said while the dairy companies' criticism of Japan and Canada is on the money - their criticism of Fonterra is not.

"Good to see that they're standing up strong and making sure that the American negotiators push hard for a good TPP outcome, that's the most important thing, and look we're on exactly the same page.

"But the second claim about dealing with Fonterra you know it's an absurd claim really, we've heard this before."

He said Fonterra is not up for discussion in the Trans-Pacific Partnership talks and it shouldn't be.

He said Fonterra is a company that was formed by farmers and it is not a monopoly in New Zealand.

"In fact when you look within New Zealand now, and the growth of other dairy companies, you know we've seen Fonterra's position slip away to about a position now where they're about 86 percent of production."

Mr Petersen said dairy in New Zealand is a very competitive industry.