4.30 pm - By PHILIPPA STEVENSON agricultural editor

The merger of New Zealand's two big dairy co-operatives is to go ahead without referral to the Commerce Commission competition watchdog.

Prime Minister Helen Clark said today she strongly supported the proposal by Kiwi Dairies and New Zealand Dairy Group to bypass the commission.

The merged company, dubbed Global Dairy Company, will incorporate the industry's Dairy Board exporting arm.


The Government would introduce legislation to put the industry in the best shape it could. The rest was up to farmers, the Prime Minister said.

GlobalCo chairman John Roadley welcomed the Government's regulatory package. It was another very important milestone in the merger project, he said.

There was plenty of work still to be done, and shareholders, who need to give the merger 75 per cent support, would get to vote in mid-May.

Agriculture Minister Jim Sutton said a select committee would take 13 weeks to consider the legislation, which will include deregulation of the industry.

He anticipated the law would come into effect from September 1.

The new company expects to operable by the start of the new dairy season on June 1.