Terms of reference for a Government review of the dairy industry and the impact of the law that governs it should be announced next month, says Agriculture Minister Damien O'Connor.

The aim was to release the areas for scrutiny next month after Cabinet approval, he said.

The Dairy Industry Restructuring Act was passed in 2001, deregulating the export industry and enabling the creation of Fonterra from an industry mega-merger without Commerce Commission approval.

There have been reviews of the act, which among other functions polices Fonterra's muscle in the domestic milk market, including by the Commerce Commission, but O'Connor has promised this year's review will be wider ranging than others, and will try to answer some of "the bigger questions" now facing the $12.4 billion export industry.


Fonterra, a farmer-owned cooperative which today still dominates the sector collecting 82 per cent of raw milk production despite the emergence of manufacturing and exporting competition, said it had no comment on the review while the terms of reference were still unknown.

All participants in the sector will be urged to make submissions to the review, to be headed by the Ministry for Primary Industries.

O'Connor wants the review completed within a year.