Grey Power Federation NZ Inc

Media Release 24 March 2011

Dairy survey signals consumer warning over poor dairy market competition

For Immediate Release

Grey Power President Roy Reid today welcomed the recent release of a Consumer New Zealand survey showing that an overwhelming proportion of New Zealanders are concerned with milk prices and want more competition in the domestic dairy market.

“91 per cent of respondents thought they were paying a high price for milk and 79 per cent agreed the Government should hold an inquiry into milk pricing” said Mr Reid

More than half of respondents (66 per cent) were aware that one milk processor (Fonterra) collects 90 per cent of all milk produced in the country and 79 per cent thought this contributed to higher prices.

“Grey Power’s 75,000 members have been hard hit by rising dairy prices over the past few years. We are told it is because of high international dairy prices and that this is good because it boosts exports.

“But we all pay every time the cost goes up. We need reassurance that market dominance by one large milk processor isn’t leading to higher prices for the elderly” said Mr Roy.

The survey revealed a significant amount of disquiet about the lack of competition in the domestic milk market with 80 per cent of respondents agreeing that greater competition in the dairy industry would mean lower prices.

“These survey results come at a time when Fonterra is trying to push ahead with its Trading Amongst Farmers (TAF) proposal, a proposal which risks entrenching Fonterra’s market dominance even further” said Mr Reid

Submissions on the TAF proposal closed last week with other domestic processors claiming TAF was all about entrenching Fonterra’s dominant position on milk supply, and frustrating domestic competition. The Government is currently considering legislation to enable TAF to go ahead.

“Grey Power is calling on the Government to slow down and to hold a proper inquiry into whether there is sufficient competition in the domestic dairy market before passing legislation to enable TAF” concluded Mr Reid.

ENDS

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