Listen: DIRA review 'needs modernising' - Fonterra

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Although the Dairy Industry Restructuring Act (DIRA) review creates healthy competition for Fonterra, it also causes uncertainty for the co-op and its farmers says Scott Walls.

Fonterra's Head of Farm Source Taranaki spoke to The Country Early Edition's Rowena Duncum about the highs and lows of the DIRA review.

"It has created competition for Fonterra and ultimately farmers have choice in who they supply milk to and then Kiwis have choices in terms of the dairy products that you can buy from the supermarket - but I have a view that DIRA really needs modernising if we want a sustainable industry for the future."

Listen below:

Walls says Fonterra is concerned about certain issues that need to have more robust regulations and monitoring.

"Fonterra believes that there needs to be a stronger focus on the risks to the industry of leaving things like open entry and raw milk regulations ... we just need to have a stronger focus reviewing them."

Fonterra has to supply the raw milk it collects from its farmers to competitors, which Walls says is fine, as long as it is supporting local business in need of assistance.

"We're totally ok with providing raw milk at cost to New Zealand companies ... we want to see them do well and for Kiwis to have choices in the dairy product aisle in the supermarket.

"But giving a leg up to companies that don't need help, like some of those ones that are backed by big foreign investors – it just doesn't make sense. Especially when they go and use that milk to compete with New Zealand companies in export markets."

"That's our main reason why we believe the raw milk regulations need to change and evolve so it supports New Zealand-owned companies whose primary focus is the domestic market."

Also in today's interview: Scott Walls explains why Fonterra collects milk in the Mackenzie Basin and how it relates to DIRA, as well as how the co-op is keeping in touch with its farmers for Mental Health Awareness week.