EU Action Extraordinary: Fonterra

EU Action Extraordinary: Fonterra

Fonterra today described as extraordinary a European Commission decision to suspend all issuing of import licences for NZ butter imported under quota into the EU.

The Commission indicated overnight that it would suspend the issuing of licences for an interim period while it considers the implication of a European Court of Justice ruling issued on Tuesday. That ruling declared that the EU regulation which sets the rules for the import of dairy products is invalid on technical grounds.

Fonterra Chairman Henry van der Heyden said suspending licenses seemed an extraordinary step for the Commission to take.

“The court has said that the European Commission has made a mistake in drafting their internal rules around the dairy trade. The Commission now needs to do whatever is required to fix that.

“But it is ridiculous for the Commission to react by stopping all trade while they decide what to do next,” Mr van der Heyden said.

“The court ruling says nothing about stopping trade. On the contrary, it implies the Commission has a strong obligation to ensure business continues uninterrupted.

“We have long-standing contracts and obligations with key European customers who rely on our product to serve European consumers. While we are confident we have sufficient product on hand to meet our customers’ needs in the short term, any prolonged delay would compromise our ability to carry on our business with them.”

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