Milk price bill goes to Parliament

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Legislation aiming to keep milk prices in check has been introduced to Parliament.

Primary Industries Minister David Carter today tabled the Dairy Industry Restructuring Bill, which includes proposals to oversee Fonterra's farm gate milk price setting.

"Because of Fonterra's dominance in the New Zealand market, the price it pays its farmers for milk at the farm gate effectively becomes the default price that all dairy processors must pay to attract supply from farmers,'' Mr Carter said.

"The proposed regime will give confidence that the aim of the Dairy Industry Restructuring Act - to drive efficiency in the dairy industry through contestable milk supply - is being met.''

Mr Carter said the legislation would primarily embed Fonterra's current milk price governance amendments into law, require Fonterra to publicly disclose information on its milk price setting, and introduce an annual milk price monitoring regime to be undertaken by the Commerce Commission.

The legislation follows a public outcry over milk prices, which sparked a select committee inquiry last year into whether people were paying too much for milk and whether the market was operating effectively.

Mr Carter said changes to the Raw Milk Regulations were still being considered, but he expected to make an announcement regarding them shortly.