Latest / Early Edition with Ryan Bridge / Peter Fraser: Dairy Industry Analyst on NZ First's proposal to amend the Dairy Industry Restructuring Act

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Peter Fraser: Dairy Industry Analyst on NZ First's proposal to amend the Dairy Industry Restructuring Act · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: New Zealand First got a new policy they want to
• 0:02
  Speaker 1: quote save the local dairy manufacturing industry. This is after
• 0:06
  Speaker 1: Fonterra sold off their consumer goods brands to the French.
• 0:09
  Speaker 1: It's called the Use It or Lose It policy. Gives
• 0:12
  Speaker 1: qualifying manufacturers investing in new value added dairy production access
• 0:18
  Speaker 1: to five hundred million liters of Fonterra milk per year
• 0:21
  Speaker 1: for ten years. The current setting is fifty million liters.
• 0:26
  Speaker 1: Peter Fraser, dairy industry analyst, with me this morning. Peter,
• 0:28
  Speaker 1: Good morning, Good morning, Ryan. So what do you think?
• 0:32
  Speaker 1: Is this too little, too late? Or is it a
• 0:35
  Speaker 1: pie in the sky? What do you reckon?
• 0:39
  Speaker 2: Probably both, Ryan, I'm really sort of reminded of the
• 0:41
  Speaker 2: old Carol King song that goes something like it's too late, baby,
• 0:44
  Speaker 2: It's too late for we really to try and make it.
• 0:47
  Speaker 2: I mean, if New Zealand First wanted to go down
• 0:49
  Speaker 2: the track of encouraging a fast moving consumer goods industry
• 0:53
  Speaker 2: in New Zealand, which is the honest, a reasonably sensible
• 0:56
  Speaker 2: thing to do, they should have done it twenty five
• 0:58
  Speaker 2: years ago when here it was set up just too late. Now,
• 1:01
  Speaker 2: and in particular, we've got a situation where we've got
• 1:04
  Speaker 2: a static milk supply in New Zealand. So every liter
• 1:08
  Speaker 2: of milk that's taken off of Fonterra and go somewhere
• 1:11
  Speaker 2: else means a stranded plant for fon Terra, and it's
• 1:15
  Speaker 2: just not going to work.
• 1:16
  Speaker 1: There's also the problem of manufacturing generally in the energy
• 1:19
  Speaker 1: that it takes to run the plants. Right.
• 1:22
  Speaker 2: Oh look, I mean if you look at at Fonterra's plant,
• 1:26
  Speaker 2: they use collectively about the same as what Rio Tinto
• 1:31
  Speaker 2: does at t why point, so very very fair point.
• 1:34
  Speaker 1: What about that? So this milk, let's say we upped
• 1:38
  Speaker 1: at as Winston wants to five hundred million liters, what
• 1:41
  Speaker 1: does that do to Fonterra.
• 1:45
  Speaker 2: Well, be honest, I think it will do nothing. And
• 1:48
  Speaker 2: the reason is I think precisely nobody will go and
• 1:52
  Speaker 2: buy the milk. Let's actually just just just stop from
• 1:54
  Speaker 2: wine and a look at five hundred million liters. To
• 1:57
  Speaker 2: give you an example, Goodman Fielder they have national brands
• 2:01
  Speaker 2: throughout New Zealand, so they've got a big footprint. They
• 2:04
  Speaker 2: would struggle to use half that perandom. So to think
• 2:07
  Speaker 2: that someone is going to turn up and set up
• 2:10
  Speaker 2: a new factory and be double of Goodman Fielder is
• 2:13
  Speaker 2: just nuts. It's not going to happen. The other major
• 2:17
  Speaker 2: problem you've got is that if you've only got the
• 2:19
  Speaker 2: milk for ten years, well then what happens at ten
• 2:22
  Speaker 2: years plus one day? You've got a whole lot of
• 2:25
  Speaker 2: factory and no milk supply. So I'll be quite blunt, Ryan,
• 2:31
  Speaker 2: the idea is.
• 2:31
  Speaker 1: Dumb, Fraser Fraser dairy industry and is not mentioning your words.
• 2:37
  Speaker 1: Thanks for your time this morning. For more from Early
• 2:40
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• 2:43
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• 2:46
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