27 Feb 2012

Fonterra wants planned milk regulation changes tweaked

7:03 am on 27 February 2012

Fonterra dairy co-operative says the Government's proposed changes to the raw milk regulations need to be tweaked to make them work effectively.

Under the regulations, Fonterra is required to provide a percentage of the milk it collects to other processors to offset its dominance in milk supply.

The Government is proposing amendments that include capping the amount of milk that each independent processor can take and putting a three year limit on supply, but increasing the total amount that Fonterra has to make available each year.

In its submissions on the changes, the co-op says the regulations should also set a minimum amount of milk that other companies have to take.

It calls for a phased-in approach to the three year limit on supply.

Fonterral also wants the supply or regulated milk restricted to companies that have their own manufacturing plant, to cut out what it calls "virtual processors" who can bypass volume limits under current rules.

The Government aims to introduce amendments to the milk regulations and other dairy legislation to Parliament in the next month.