Friday , October 9 2015
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Fonterra’s ‘virtual monopoly’ must be diminished – US Teamsters Union

The Teamsters Union’s Mike Nolan has lashed out at Fonterra saying the NZ dairy giant’s “virtual monopoly” must be diminished if the TPP is to go ahead.

Nolan – who touched base with the US Dairy Council in Washington DC before coming down to Auckland for the 15th round of TPP negotiations – claimed that there would be $US20 billion in losses for the US dairy industry over the first decade of TPP if the alleged monopolistic dairy player from New Zealand was allowed free access.

He said the US dairy industry was facing a difficult time due to the impact of the GFC and a lengthy drought which had pushed up feed prices and caused dairy farm revenues to plummet below production costs. “We  are concerned about cheap NZ dairy imports  to our market depressing wages at a time when they are hurting  …the bottom line is it is bad for my members in the Teamsters Union.”

Nolan also suggested there would be strong opposition within Canada to liberalisation of the domestic dairy market. There was the ‘mother of all fights’ on this score during the Nafta negotiations between the US and Canada, he said. “The Canadians are not going to open their market just like that.”

He said while dairy was an important factor in the New Zealand economy accounting for 25 per cent of exports (“dairy access is the biggest issue for NZ and Fonterra”) there seems be a confrontation looming which would “make debate on the fiscal cliff look like a walk at the beach.”

Nolan predicted the US Congress would reject a bad deal and said there was  bipartisan support to exclude a dairy agreement within TPP among the House dairy farmer caucus.

On the plus side he did praise Fonterra’s global labour agreement saying it incorporated ILO standards – ” it is a model for the US dairy sector.”

One stakeholder commented that he had opposed the Fonterra setup believing there should have instead have been two larger competing companies. But he pointedly told Nolan there were no subsidies in New Zealand for the dairy sector and his members would benefit from cheaper products.


About Fran O'Sullivan

Fran O’Sullivan is Managing Director of NZ INC. She is a former editor of the National Business Review and a prominent columnist for the New Zealand Herald, where she writes on business, politics, and international affairs, and manages the annual high-profile Mood of the Boardroom project. Fran took up the position of Editorial Director – Business for NZME in April 2015.

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