By Brian Fallow
WELLINGTON - The Government has spelled out to the Commerce Commission its policy on the dairy industry's proposed mega-merger.
Under the Commerce Act, the commission is required to "have regard to" that policy as it considers whether to approve the merger, but it is not bound by it.
The policy
statement follows extensive, and by all accounts tough, talks between the Government, headed by Finance Minister Sir William Birch, and industry representatives.
The statement says the Government will remove or reduce regulatory barriers to entry in the dairy industry and remove the Dairy Board's export monopoly.
It also sets out the provisions for exclusive export rights to quota markets.
As part of a comprehensive restructuring, the board and almost all of the dairy processing cooperatives have sought the commission's authorisation to merge.
Part of the proposal is that the merged company would divest an integrated town milk and consumer products business selling liquid milk, butter, cheese, yogurt and the like in the New Zealand market.
That is likely to be Kiwi's Mainland operation or the New Zealand Dairy Group's Dairy Foods business.
The commission's decision is due by September 13.
Meanwhile, select committee hearings into the legislative changes needed to give effect to the restructuring begin on Tuesday.
