Dairy Industry Restructuring Act 2001 review

A comprehensive review of the Dairy Industry Restructuring Act 2001 (DIRA) and its impact on the dairy industry was announced in December 2017. Find out about the review.

Update – 6 June 2019

Decisions about changes to the DIRA released

We've released information about the decisions and changes to the DIRA that the review and public consultation generated. 

Overview

The Dairy Industry Restructuring Act 2001 (DIRA) promotes the efficient operation of New Zealand dairy markets.

The DIRA is a significant driver of the dairy industry's performance. When the DIRA was introduced in 2001, it transformed the dairy industry by enabling the creation of Fonterra. A lot has changed since then. In 2015/16 the Commerce Commission reviewed the state of competition in the dairy industry. This review was built on that analysis by taking a more strategic focus and look at the effectiveness and impact of the DIRA across a range of areas. This includes incentives or disincentives the DIRA creates for the dairy industry to transition to:

  • higher-value dairy production and dairy processing that global consumers seek for a premium
  • more sustainable environmental practices on and off-farm.

Find out more

Where we're up to

As at June 2019, we're at Stage 3. Government has now made policy decisions that will be implemented to amend the DIRA. You'll have an opportunity to comment on government decisions as the Bill progresses through Select Committee.

Policy recommendations

We've released information about the policy recommendations for regulatory changes to the DIRA, and about what will happen next. 

Stages of the DIRA review process

Key stagesIndicative timing

Public release of the terms of reference

May 2018
Stage 1: Determining facts and building evidence 
Issues identification:
  • Initial stakeholder meetings
  • Analysis of issues and identification of options
May to August 2018  
Stage 2: Considering options for change 

Options identification:

  • Development of consultation document
  • Release of the consultation document
  • Public consultation
  • Analysis of submissions
  • Regulatory Impact Analysis
September to December 2018    

Final report to Government:

  • Overall findings of the review
  • Policy recommendations for regulatory change
Early 2019  
Stage 3: Implementation of review's findings 

Legislative change process:

  • Drafting of the Bill
  • Parliamentary processes
During 2019  

Background

In 2001, the DIRA allowed the creation of Fonterra through a merger between the 2 largest dairy cooperatives of the time and the New Zealand Dairy Board. The DIRA provides a framework to regulate the activities of Fonterra as a dominant dairy processor, including monitoring of its farm gate milk price setting processes. It also provides for the dairy export quota management system and regulates herd testing and the dairy core database.

In 2015/16, as a statutory requirement, the Commerce Commission did a review of the state of competition in the dairy industry. Further to recommendations in the report, the previous Government proposed changes related to competition in the sector. However, these were not considered by Parliament and were therefore not implemented.

On 19 December 2017, the Government announced a comprehensive review of the DIRA and its impact on the dairy industry.

In February 2018, the Dairy Industry Restructuring Amendment Bill (No 2) was introduced to prevent the DIRA's efficiency and contestability provisions from expiring in the South Island to allow time for a comprehensive review.

Staying in touch

If you have thoughts or comments on the review, or you would like to get DIRA updates, email dira@mpi.govt.nz

 

Last reviewed:
Has this been useful? Give us your feedback