Source: New Zealand First
New Zealand First is proposing changes to the Dairy Industry Restructuring Act 2001 to incentivise investment in value-added dairy manufacturing in New Zealand, New Zealand First Leader Rt Hon Winston Peters announced today.
The ‘Use It or Lose It’ policy would give qualifying manufacturers investing in new value-added dairy production access to up to 500 million litres of Fonterra milk per year for ten years, by lifting existing regulatory settings tenfold from 50 million litres at present.
“The Lactalis sale should be a turning point, not the end of the manufacturing line,” Mr Peters says.
“Fonterra has made its choice. Now New Zealand must make our choice.”
“Fonterra was created by Parliament to build a dairy co-operative of extraordinary scale to sell milk and dairy products, and Parliament has the right and the responsibility to ensure the system to turns our milk into the maximum possible value for New Zealand jobs, wages, skills, and exports.”
“The legislation currently allows independent processors to access up to 50 million litres of milk per season, but this is too low to incentivise manufacturing of substantial scale, so we will lift it tenfold to 500 million litres.
“The current regime can help investors start, but it is specifically designed not to help them reach industrial scale, and that is not appropriate now that Fonterra has sold its own consumer products.
“The current rules tell investors: don’t bother. That must change.”
Under the policy, qualifying manufacturers could access up to 500 million litres annually for the first six years. The entitlement would then taper to 80 per cent, 60 per cent, 40 per cent and 20 per cent over the following four years before ending, as an incentive on the market to ‘use it or lose it’ by investing now in New Zealand-based dairy manufacturing prospects.
“To qualify, you need to establish a dairy product manufacturing base in New Zealand marketing ‘New Zealand dairy’ to the world.”
Milk would not be subsidised. Manufacturers would pay the farm gate milk price plus efficient collection and delivery costs.
“Fonterra and farmers would be fairly compensated, but this provides certainty to new investment in the dairy market to diversify, secure New Zealand jobs, and add value to New Zealand milk.
“This is certainty for any business willing to manufacture dairy products in New Zealand.”
The proposal would be advanced through the current review of the Dairy Industry Restructuring Act, for which the next Minister of Agriculture is due to report to Parliament in 2027.
“We want industry in New Zealand. If investors want to invest more in higher-value manufacturing, then our economic settings should welcome them.”
“Build the factories. Build the brands. Take New Zealand dairy products to the world.”
Original source: https://nz.mil-osi.com/2026/08/20/nz-first-launches-use-it-or-lose-it-dairy-policy/