The proposals were a backward step said Fonterra chairman, Sir Henry van der Heyden.
Van der Heyden said: “The Government’s move to require more raw milk to be handed over to increasingly foreign-owned dairy companies operating in New Zealand will impose nearly $200m of additional costs over the next three years alone and work against our efforts to reduce the price of milk in New Zealand.
“That’s because not one of the six other major dairy processors supplies milk to New Zealanders. The proposed changes will see windfall profits head straight into the pockets of increasingly foreign-owned dairy companies and will hinder, rather than help, New Zealanders get access to affordable milk.”
Sir Henry says the extra 200 million litres of milk the Kiwi owned co-operative will be required to supply competitors each year will head straight offshore as the increasingly foreign-own competitors simply ship it as milk powder to their lucrative overseas markets.
The Fonterra chairman says its farmers are angry that their 1,500 submissions have been ignored and that they are being press-ganged into this great milk subsidy that is poorly targeted and stands to miss the people it’s meant to help – Kiwi families.
International competitors will be laughing at New Zealand, and it will be all the way to the bank. When they hear about this easy milk pipeline in New Zealand, more of them will be queuing to get in the door and skim off the easy profits of effectively buying up to 770 million litres of Fonterra produced milk, at a subsidised price and with no risk, the chairman said.
Source: Fonterra
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