The review, initiated by Agriculture Minister Todd McClay, aims to re-evaluate key provisions including raw milk pricing formulas, regulated wholesale milk supply obligations, and open entry and exit rules for farmers. OCD Chief Executive Mark de Lautour expressed deep concern that the terms of reference lean heavily toward deregulation, warning that removing fundamental protections could undermine decades of work aimed at fostering a competitive, multi-processor dairy market.

While Fonterra’s share of New Zealand’s total milk pool has gradually declined from 96% at its creation in 2001 to approximately 78% today, OCD points out that independent processors still operate at a structural disadvantage. With OCD holding roughly 12% of the national milk pool and other independent processors accounting for minor market shares, the company argues that Fonterra continues to possess significant market power that requires strict legislative oversight.

A major focus of OCD’s submission centers on regulated wholesale milk supply and price transparency. OCD cautions that following Fonterra’s sale of its Mainland Group consumer brands portfolio to Lactalis, a post-divestment Fonterra focused purely on bulk ingredient manufacturing would have both the incentive and ability to squeeze independent processors on raw milk pricing if DIRA’s regulated supply rules were removed or diluted.