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Fonterra a failure in concept and in practice

Written By: - Date published: 6:10 pm, February 9th, 2018 - 109 comments
Categories: business, economy, Economy, Environment, farming, farming, Financial markets, water - Tags: , , , ,

Fonterra as a construct – the establishment of a NZ Inc monopoly for the dairy industry – has been an abject failure for dairy farmers and a disaster for the environment.

In a stunning analysis from a quarter least expected, share market analyst, Arie Dekker of First NZ Capital, reveals there have been negligible increases in dairy farmer returns in the 17 years since Fonterra was formed, despite a 108 percent increase in milk production over that time.

“Taking inflation-adjusted milk prices from just prior to Fonterra’s formation to 2017 highlights very limited improvement in the total payout received by New Zealand farmers over the last 20 years,” he said in a note to investors.

“Despite some elevation in the payout evident for periods over the last ten years, it is hard to argue that the creation of a national champion in Fonterra has led to a sustained material upwards impact on the farm gate returns received by farmers over the last 20 years.”

Essentially, what Dekker is saying, is that the amazing and unprecedented degradation of our environment, particularly our waterways, in the last 20 years, under the guise of economic imperative, all has been for nothing.

Farmers have slogged away, doubling production for no improved return. Farmer and industry returns would have been no different had the whole movement of dairy conversion and intensification never taken place.

Not only that, but Fonterra’s shares have been a poor investment – their price over the last five years has fallen 3% against the NZX50 index’s 92% rise over the same period.

Dekker suggests the whole raison d’etre for Fonterra could come under intense scrutiny following the new government’s “surprise” announcement last month it will undertake a comprehensive review of the dairy industry.

He said that given that the Commerce Commission and previous government had just completed an industry review, and another review was scheduled in 2020/21, this announcement suggests the government clearly has an agenda.

It was also not surprising that environmental issues would come under scrutiny during the review.

“The inclusion of the Green Party in the Coalition Government accentuates the prominence that environmental matters will likely get and there is clearly some scope for matters regarding volume vs value-add and the environmental impost of dairy in New Zealand to overlap,” he said.

Agriculture Minister Damien O’Connor said the review would “allow a more strategic focus to be taken for issues facing the dairy industry, including, for example, environmental issues, land use and how to achieve the best outcomes for farmers, consumers and the NZ economy.”

The Labour-led government was likely to take a more holistic approach to all dairy matters and was likely to focus on farmer returns, the success the dairy industry and economy has had to move up the value curve and how more intensive land use to increase volume has affected returns, Dekker said.

The government was likely to support moves to place constraints on milk supply, which would help force the industry to consider adding value rather than volume, Dekker said.

His analysis throws into question the whole concept of pushing milk as a commodity and going for volume, something that was integral to the former National government’s economic strategy.

New Zealand milk production has more than doubled over the last 20 years, partly due to a 35% increase in land use for dairying, and partly due to a 12% increase in average cows per hectare.

“Greater land use and intensification (as measured by cow numbers/hectare) only explains part of the increase in milk production with genetic improvement and greater intensity on other inputs likely explaining the rest,” Dekker said.

Total payouts to farmers have barely lifted

He said there has been an inability in New Zealand to “lift the mix of its output to value-add sufficient to flow through into better co-operative payouts”.

The co-operative’s share price reflects the failure to move away from commodity milk powder to value-add.

“For New Zealand farmers then, it is more in the increase in milk supply (a portion of which has come from more hectares and cows) that has driven an increase in their revenues over any strong evidence of material benefits from the New Zealand industry’s push into value add.”

Other inputs such as palm kernels, which also increase costs, also explain the higher volume.

Dekker said that if total milk supply in New Zealand is to be constrained following the review, Fonterra will have to look more and more offshore and that’s where the limitation of the company’s structure as a co-op will come into play – its lack of access to capital from cash-strapped farmers.

Fonterra as an investment has been a dog

It is interesting to contrast Fonterra with a company such as A2, which has put all its eggs into the value-add, intellectual property game.  The Auckland headquartered company turns over just $262 million against Fonterra’s $19.2 billion, has seen its market capitalisation soar to $6.5 billion, around two thirds of its giant neighbour.

Fonterra’s efforts to move offshore raise questions not just about the appropriateness of its structure but its ability to operate offshore. Basically, the evidence shows the farmer-run company is out of its depth.

Its move into China has gone from catastrophic to the merely financially disastrous.

It would be hard to imagine a worse investment than what Fonterra made in SanLu, whose melamine-tainted milk caused 294,000 Chinese infants to be ill or hospitalised, including six deaths. Some Sanlu staff were executed, at least one executive given a life sentence and one committed suicide. No Fonterra staff took responsibility. Fonterra had to write off its $200 million investment in 2009.

As a PR disaster, that’s almost impossible to top.

Still, in financial terms, Fonterra is giving it a go with its Beingmate investment in China.

Fonterra paid $774 million for an 18.8% stake in 2015, buying in at 18 RMB (Chinese Yuan) a share. The share price today is under 5 RMB, so Fonterra is sitting on losses north of $550 million. And it looks like a total write-off is on the cards.

Beingmate’s shares today sank below 5 RMB

The idea of forming a global partnership with a Chinese player seemed sensible enough.

But another PR disaster, the botulism false alarm – which resulted in major customer, French company Danone, successfully suing Fonterra for $193 million, meant Fonterra was limited in its choice of potential Chinese partners and ended backing the wrong horse.

Beingmate was China’s largest infant formula manufacturer and distributor, founded by respected food scientist and entrepreneur, Sam Xie Hong. It offered Fonterra a huge distribution network for its Anmum infant formula brand. But the joint venture they set up, Darnum, has proved dysfunctional and Beingmate was a bricks and mortar retailer/distributor, a factor that proved fatal.

Beingmate has resisted distributing Anmum, while formula retailing in China shifted suddenly online, leaving Beingmate’s 40,000 outlets virtually useless.

Two weeks ago, the previously profitable Beingmate announced the latest in a series of earnings downgrades – from a previously forecast loss of 350m-500 RMB to 800m-1b RMB (171m-$214m).

A serious board split and doubts about the reliability of its financials resulted in Fonterra saying publicly it was “extremely disappointed”.

The Shenzhen Stock Exchange, where Beingmate is listed, then requested the company to provide documents to the China Securities Regulatory Commission’s Bureau of Supervision. Beingmate reportedly sent a letter to the regulators blaming Fonterra for its losses, telling Bejing News, “due to a variety of reasons (most of which were caused by Fonterra) Beingmate had a sharp decline in operating performance and encountered business difficulties”.

“It has come to a point that the two parties could not reach agreement, which is seriously affecting the company’s business operation and development,” it added.

Business commentator Rod Oram, said in a Newsroom article that Chinese media are reporting Fonterra is seeking to take over Beingmate, something the co-op is denying. Such a desperate move is either bold or even more foolhardy.

FNZC’s Dekker says that Beingmate’s terrible financial performance is not as concerning as the reservations expressed by Fonterra members on Beingmate’s board about its financial management and reporting practices.

Pressure will come on Fonterra when it reports its half year results next month, “for a much more open discussion on Beingmate”, he said.

However, openness is not in Fonterra’s DNA. It won’t come easily any more than changing its untenable structure.

(Simon Louisson is a retired journalist who reported for The Wall Street Journal, AP Dow Jones Newswires, New Zealand Press Association and Reuters and briefly was a political and media adviser to the Green Party.)

109 comments on “Fonterra a failure in concept and in practice”

  1. Rooney 1

    Without he formation of Fonterra the NZ dairy farmer would have become serfs to the multnationals – whom at the time of the Dairy Board dissolution would have swooped in. How about “NestleKiwi” and “KraftNZDairy” controlling the means of production?

    How beneficial would have that set-up been for the dairy farmer?

    • Leonhart Hunt 1.1

      although groups of NZ owned consortiums could have been viable instead of this market controlling fonterra, competition healthy and stops abuses like massive CEO payments (isn’t he over $500,000 per year now?,) and rampant domestic price growth, butter at $5 – 6 per block anyone?

      Fonterra has market dominance in NZ with little/no competition and with the rise in synthetic milk (very neat, you should look it up, its brewed) which is cheaper for production that local milk and can be made in country so no export costs on demand what will fonterra do? (the same goes for NZ meat industry with the rise of “clean meat” vat grown that is 1/3rd of the price of normal meat and tastes the same.)

      NZ is in for some tough choices as our export markets crumble.

      Edit: Correction Fonterra CEO is on 8.3mil per year.

    • Ad 1.2

      The from-formation counterfactuals are endless and entirely pointless.
      We are dealing with Fonterra and the NZ dairy industry as it exists now.

      Fonterra is never going to be another Danone while it continues to be required to take all fresh milk offered. So there’s a little hint.

      Fonterra can be reviewed and usefully tilted. In the interests of New Zealand, it needs to be.

      • Antoine 1.2.1

        “We want to review you and usefully tilt you”
        “Piss off Noddy, our strategy is none of your business, we only answer to our shareholders”

        • One Anonymous Bloke 1.2.1.1

          What Parliament has done, Parliament can undo, Noddy.

          • Antoine 1.2.1.1.1

            I doubt Parliament is in a hurry to declare war on the farming sector

          • Gristle 1.2.1.1.2

            9% of global milk production is exported: the rest is consumed within the country of origin. Fonterra (with milk from NZ) accounted for 25% of the total milk production that was exported. That means that of all the milk produced in the world, Fonterra exports 2.25%.

            The production from farms around the world needs to only rise by a couple of percent for them to swamp the demand for export milk. (A couple of percent rise in the 91% is equivalent to Fonterras total export.) This why Fonterra are extremely vulnerable. Anytime prices start to rise “reserve” capacity will kick in within12 months and more milk will be made available to the market.

            Being a supplier of Milk powder for processed food is probably the worst place to be in. This is a commodity that is easily substituted by another supplier. Milk powder is also the most likely entry point for “brewed” milk (the stuff that will come from yeast and can be made with way less water, power, land and pollution than we do it with cows.

            The brewed milk is a GM product. Yeast is being manipulated to produce goat milk, sheep milk, cow milk. It won’t be long before infant formula will be included in that list.

            When I want to drink milk or have yoghurt or butter or cheese, I imagine Heidi with a couple of cows in a sun kissed alpine meadow. Industrial milk production is no where close to this image, but IMO, the consumers of high end products will follow producers who do move into better treatment of cows, land etc.

            Payment structure for milk at the farm gate should be changed to include recognition for:
            All water ways being fenced
            Bush planting season along water ways
            Nitrate levels
            Phosphate levels
            E-coli count in water
            Shade for stock
            Antibiotic usage levels

            • Antoine 1.2.1.1.2.1

              > Payment structure for milk at the farm gate should be changed to include recognition for:
              > All water ways being fenced
              > Bush planting season along water ways
              > Nitrate levels
              > Phosphate levels
              > E-coli count in water
              > Shade for stock
              > Antibiotic usage levels

              Why bother to incentivise those things when you can simply regulate for them?

              A.

    • Nic 181 1.3

      So we did not become serfs to the multinationals and we invested billions into China and bugger, the Chinese took it and gave Fronterra the finger. We buggered our environment to do it to but we are MUCH better off as a result. Arn’t we??????

    • Ed 1.4

      We are becoming serfs to China anyway.

    • steve bradley 1.5

      Recall the persistent international pressure (read USA) to demolish the state monopoly system pre-exisiting. This consisted of regional Coop Dairy Companies owned by farmers coordinated by the NZ Dairy Board owned by the Crown. The Dairy Board also smoothed prices from good seasons to bad. The ‘single desk seller’ which had helped build a viable NZ dairy industry was replaced by Fonterra and as the research shows, not a very sustainable outcome.

  2. Jack Ramaka 2

    Councils have let the Dairy Industry pollute our rivers and streams, by not enforcing the law ?

    • ropata 2.1

      Yeah they saw what happened to ECan when they tried to stop the irrigation lobby from hogging all the water. Disbanded and taken over by Nat henchmen

      • Antoine 2.1.1

        So now we have a Labour led government, it should do the opposite and make councils enforce the law

  3. Nic181 3

    Here is my take on the part of the last National government in this.
    Lets increase GDP by doubling dairy exports. What do we need to do here? Lets give Fronterra more encouragement.
    Lets intensify farming by irrigating dry land. Bugger, Canterbury is the best place to do this but ECAN won’t consent it. Lets sack ECAN and appoint a set of pussy commissioners who will do what we want. Bugger,the locals don’t like that. Lets give Fonterra more encouragement.
    Lets allow overseas investors to buy up farms and give them an easy ride to dairy conversions. Bugger, the production won’t increase without irrigation so ECAN can consent that. Bugger, there is no money for irrigation so lets sell off our power stations to fund it. Bugger, there is a public reaction to this, we can’t understand it and we get a lot less than we hoped. Bugger again! Bugger, there is a huge increase in dairy profits going overseas, we didn’t see that coming! Lets give Fronterra even more encouragement.Lets allow increased nitrates in leached and run off water and lower water levels in rivers. Bugger, Lake Ellesmere is now a swamp, the Selwyn river is a dribble and bugger, there are toxic algae in places where kids swim. Bugger, nitrate levels are rising in Ashburton, Dunsandel and in shallow wells across Canterbury. Bugger, Fronterra have cocked it up with investments in China, lets encourage them anyway! Bugger, none of this is usual but it is OK, we are all making money. Bugger, the dairy auction price dropped again and we are facing a drought. Bugger, the river levels and expensive dams are too low to irrigate.
    Bugger, we have farmers needing taxpayer drought relief, they face going broke and might not vote National!!
    My apologies for any incongruence in the timelines above. 🙂

  4. Corrie 4

    It seems to me that Fonterra was sold to farmers as the next best thing to the Dairy Board, since there had been huge competition and shoving about from various dairy companies prior to Fonterra’s formation as they juggled for potential control.
    Henry van der Hayden seemed privately committed to getting “nzdairy.inc” listed on the NZX and allowing non-farmers to buy shares in Fonterra (where shares had previously only been available to farmers themselves) – an act that opened the way even further to “Queen Street farmers” who were interested in ROI to the exclusion of anything else.

  5. Ad 5

    Simon can you please link to the research that you cite.

    • Bill 5.1

      I think Simon may have taken the analysis from other published articles rather than from research per se. I can’t find anything by way of a research paper when I google search Arie Dekker and Dairy or Fonterra or First NZ Capital, but get article hits from the quotes.

  6. Reading all the shit about what’s happened to them in China it’s almost like they’ve been targeted.

    The big problem for them in NZ is that they’ve failed to add value and going the cheap route of simply adding more cows. Flooding the market doesn’t really produce better returns whereas producing higher value products does.

    They should be forgetting the export of milk powder.

    And then they’ve been acting like their a capitalist company rather than a cooperative. Extending into China and elsewhere should have been the same as NZ – bringing in farmers as part of the cooperative.

    And they shouldn’t be trying to own the distribution of the products. Put the products up online and with direct sales from the local farmers who are part of the cooperative to customers with delivery via courier. Bypass the middlemen.

    To be honest, I’m not surprised by their failure to read the market. All of NZ business seems reluctant to go online.

  7. Antoine 7

    Fonterra has clearly had its woes, including some bad misadventures in China.

    Some of its problems (particularly recently) are driven by the international dairy market rather than being its own doing.

    I guess it is all very well to speculate about whether the creation of Fonterra was a good thing, but ‘where to now’ is a better question.

    If I was the Govt I would not be thinking about meddling with the structure or strategy of Fonterra. Those things are not the proper domain of a modern Government. Rather, I would be thinking about cracking down on land and water management practices – both tightening the regulations and adding some teeth to their enforcement. Leave it to the dairy industry to figure out how to clean up its act, and how to continue to make a buck in an increasingly difficult operating environment.

    A.

    • One Anonymous Bloke 7.1

      That settles it. The government should definitely re-assess Fonterra’s entire structure and strategy.

    • Keepcalmcarryon 7.2

      If it was the proper domain of the government when it was set up, its their proper domain to make sure it works and change it to suit NZ as a whole when needed.

    • Pat 7.3

      Leaving it to the industry to figure it out hasnt worked too well for the red meat industry to date…and an 8 million remuneration package for the CEO that oversaw Beingmate venture….I think your faith may be a little misplaced.

      • Antoine 7.3.1

        It really is up to the shareholders. Its their money

        • Pat 7.3.1.1

          yes it is….as it has been for 20 plus years for the meat co’s.

        • Keepcalmcarryon 7.3.1.2

          Antoine Fonterra was “ allowed” by government for the national good.
          Bearing in mind the national interest, shareholders be f&$ed, they haven’t looked after the rest of the country environmentally let alone with reasonable pricing.
          Let’s hope their pigeons come home to roost.
          It’s our country

          • Antoine 7.3.1.2.1

            So the role of the Govt is to hold them to account on the environmental side. Let’s see some of that!

            A.

            • Keepcalmcarryon 7.3.1.2.1.1

              The National government dismantled environmental protection by stacking Ecan with irrigation toadies, they could certainly govern to destroy the environment. Why shouldn’t the current government govern for the environment?

        • tracey 7.3.1.3

          Not when it impacts our environment

          • Antoine 7.3.1.3.1

            Sure! Let’s regulate the environmental impacts and make sure that regulation is enforced.

            A.

  8. Keepcalmcarryon 8

    Sounds like the Chinese simply scammed them, fronterra bought in and suddenly the books are hazy and distribution changes overnight. Bye bye 500 million dollars.
    That’s an obscene amount of farmers money to lose how do those muppets at the top get payed at all let alone bonuses.
    As far as fronterra saving us from nestle etc, frankly having several players in our market would be better for the consumer and prevent rorting the public eg local butter, milk prices etc. Farmers are more than happy to sell farms to overseas “ investors” to get top dollar ,it’s hardly like they are patriotic.
    By rorting the kiwi public over dairy prices fonterra have helped to withdraw dairy farmers social license to operate.
    It will be interesting to see if there will be meaningful change after the investigation, I hope so but suspect not.

    • Jack Ramaka 8.1

      New Zealanders are very naive when it comes to International Trading, many executives are as green as grass, and do not have the experience or understanding of these countries and the marketplace.

    • Jack Ramaka 8.2

      The Chinese will always look after the Chinese people and their companies first, we learn’t that in International Economics at University in the 1970’s.

      NZ could learn a lot from the Chinese and the Japanese, rather than following new world neoliberal economics ?

  9. Ian 9

    Fonterra may be a dog at times but apart from Tatua it still leads the way in returns back to farmers.
    It is obvious that most commenters here know jack shit about dairy farming and Fonterra and are so used to regurgitating anti dairy farming propoganda they have lost any ability to look at the subject rationally.
    Why not come and see and hear for yourself
    In a move aimed at showcasing on farm water quality and environmental management Align Farms in Mid Canterbury is inviting to an open gate field day.

    In conjunction with MHV Water, Align will open its Longfield farm just south of Ashburton to the public on February 13.
    A spokeswoman for MHV Water said balancing environmental, social and economic sustainability is critical as the farming community continues to seek improved water quality and environmental outcomes.
    It was always top of mind as farmers and industry worked together in farm management and planning, especially when it comes to water quality and sustainable use.
    “Our farming community is committed to implementing good management practices to help achieve improved water quality and other environmental outcomes while concurrently enjoying the success of thriving businesses.”
    She said MHV Water and Align Farms were proud to showcase such a business through the open gate field day.
    The day would feature a farm walk with industry experts at Align Longfield, 1037 Rangitata Highway, Hinds, starting at 10am.
    “This is an open invitation to see first-hand the hard work being done in the agricultural sector to ensure that production goals and profit are achieved in balance with environmental goals.”

    • One Anonymous Bloke 9.1

      First NZ Capital are anti dairy propagandists? Doesn’t sound very likely. All those promises of increased returns haven’t panned out and we’ve got a huge cleanup bill to boot.

      Very shoddy.

  10. Roy Cartland 10

    Request to Author:
    Can you elaborate a bit on this A2 company? What kind of value add? How could fonterra learn from them?

  11. RuralGuy 11

    This post, and the articles of which it draws itself from, lack any genuine analysis of options, solutions and alternatives.

    It’d be worthwhile to reflect upon why Helen Clark and the then Labour government allowed for the formation of Fonterra, but also think about some of the flaws that the original legislation had.

    Ultimately, the creation of Fonterra allowed for a single seller export desk. Prior to Fonterra, NZ Dairies, Kiwi, Tui etc etc all used to compete internationally with each other with a similar basket of products, and they used to compete on price which was to the detriment of NZ farmers overall. That was dumb, and forming Fonterra was the right thing to do.

    The legislation that allowed for the formation of Fonterra had some issues. This isn’t a criticism of the government as it probably couldn’t have foreseen the issues.

    Issue 1 – the allowance of free entry into Fonterra. This meant that Fonterra was not allowed to refuse any new farms or any new milk. So you’ve created a business that has little control in it’s manufacturing volumes because they need to pick up and pay every drop of milk that farmer offer it. As a farmer, this was a huge benefit to me, effectively it completely de-risked my business as I always had a market for my produce. Fonterra became an insurance for the entire sector. It allowed me (and others) to grow uninhibited. Fonterra have never once asked me to grow my business despite what some here may think.

    This issue then creates further down stream issues for Fonterra – as in we need to invest an manufacturing and find markets to sell this tsunami of milk. As Fonterra is a co-op, it is limited in its capital raising capability (can’t do IPO’s etc to raise capital for growth) as the capital needs to come from farmers. So it had to deal with this tsunami of milk by building powder plants to making commodity products because this is the cheapest way to turn a raw perishable product into something that can be sold easily. It couldn’t put all the new milk into value add because it was cost prohibitive to do so.

    Interestingly enough, Fonterra has consistently lobbied to remove this obligation whenever DIRA has been reviewed. I wonder how many Standardista’s were aware that Fonterra were doing so, and I wonder how many were away that Labour & National were reluctant because it would disadvantage farmers from growing there farming businesses. See the DIRA review of 2017 for more detail.

    Next Issue was DIRA milk. It made Fonterra give discounted milk to smaller NZ operators. This was intended to support NZ’s domestic competition. Largely it still works well for the domestic purposes. Consider Goodman Fielder, Lewis Road, Pam’s, Dairy Dale etc etc. But what happened is that it also provided an insurance to overseas based companies to come to NZ and set up a dairy factory and export product overseas, all using milk from Fonterra. So Fonterra became an insurance company for other businesses so could guarantee them milk for export. We’ve got Chinese milk companies setting up here exploiting this loop hole.

    Fonterra had again submitted that they support supplying milk to any domestic milk business, but feel they should not have to subsidise other exporters.

    Finally, let’s think about the other domestic companies as a contrast to Fonterra. Let’s start with Open Country Dairies. This is a business owned by Talleys, who are NZ’s second largest player. They actively exploit the cheap milk from Fonterra rules, and have virtually non-existent environmental rules. They believe that it’s up to farmers to sort out their own sustainability and that they shouldn’t be involved. They actively recruit farmers from Fonterra who are disgruntled about having to meet Fonterra’s far more strenuous environmental rules. You need to understand, if you want to dismantle Fonterra, you’re giving a green light to Talley’s to grow their business.

    Ultimately, I think what’ll actually happen Fonterra will actually be given more sensible commercial expectations around milk collection and DIRA milk provisioning, and they will get more leeway on suspending and milk for non-compliance then they currently have. In other words, export Fonterra to have reduced levels of regulation so their not hamstrung in chasing haigher value products.

    • Keepcalmcarryon 11.1

      It’s not all about inability to capitalise. Fonterra shut the Kaikōura cheese factory which was profitable but could make more profit sending milk further to another factory so closed it no thought given to the rural community.
      That Factory could have been used for high value niche cheese production but Fonterra didn’t want more niche brands it has Kapiti already. Before joining Fonterra the factory made great local cheese also profitably.
      It’s the mass production mentality vs the good of keeping rural business.
      The consumer more and more wants to taste local and know the story of their food
      Fonterra wants to churn out milk powder that can be blended in to whatever.
      Small scale environmentally sustainable grass fed niche dairy is where the consumer is going. It also happens to keep jobs and people rurally.
      That is certainly not where Fonterra is going.

      • RuralGuy 11.1.1

        Incorrect. The Kaikoura product mix was a dog, and (as a legacy plant with significant maintenance costs), had a poor roi in comparison to other sites, especially when you consider the north Canterbury pasture curve. The stainless utilisation was horrible.

        You’ve got to remember 97% of Fonterra’s consumers are international customers that wouldn’t know Kaikoura from Kawakawa, so Fonterras customers aren’t interested in a regional factory that they have no connection with.

        • Keepcalmcarryon 11.1.1.1

          Not incorrect. Said factory was turning profit.
          Fonterra refused to onsell factory on closure despite local interest, to negate competition and dismantled it, sold buildings to bee keepers. 30 jobs lost locally.
          Footnote,corporate beeping company said to use Filipino labour.
          Your language is arrogant.

        • Keepcalmcarryon 11.1.1.2

          International consumers value grass fed environmentally safe product ( why did China value NZ baby milk powder?origin has value)
          . Damn straight they wouldn’t know a Kaikōura product from a kaikohe product when it’s a powder in a bag and the manufacturing company doesn’t give a shit to differentiate or value add .
          Developing that value is where Fonterra and clearly you are totally missing the boat.

          • RuralGuy 11.1.1.2.1

            And if Kaikoura was a nutritional drier, then you’d be right. But it was a old cheese plant that had big big issues with the whey by-product disposal with limited stainless utilisation in Autumn and Winter. It’s roi was less then moving the milk south and banging it thru Darfield.

            Ultimately when Darfield went up and Fonterra stepped into buy Studholme when NZDL went into receivership, all stainless in Canterbury was up for review, and the poorest performing asset was shut.

            You might think I’m arrogant, I don’t really care what people think. It was a legacy factory making the wrong product in the wrong place.

            • Keepcalmcarryon 11.1.1.2.1.1

              It’s a fair call- you don’t care what people think.
              It’s an industry failing.

              • RuralGuy

                So, rather than complain; what are the DIRA policy settings (as this is the topic at hand) that you want too see?

                • Keepcalmcarryon

                  Break up the monopoly.
                  Farmers believe in the free market and overseas land sales, so open it up let them actually experience the market sans monopoly. The environment and the local dairy market are worse off for the monopoly albeit some people have become rich and own multiple properties.
                  Ban overseas land sales
                  Cancel irrigation subsidies and buy back or cancel ove4 allocated water.
                  Tax N
                  Disallow imported farm labour.
                  Btw I’m not complaining I’m observing.

    • As Fonterra is a co-op, it is limited in its capital raising capability (can’t do IPO’s etc to raise capital for growth) as the capital needs to come from farmers.

      See, this is the problem with people talking about the financial system without knowing anything about the financial industray. Fonterra, being the massive organisation that it is, can issue bonds to raise money.

      An organisation doesn’t actually need to sell itself to raise money.

      They actively recruit farmers from Fonterra who are disgruntled about having to meet Fonterra’s far more strenuous environmental rules.

      Which means we need government regulation that’s at least as good, if not better, than what Fonterra have.

      • RuralGuy 11.2.1

        See, this is the problem with people commenting on the rural sector without knowing anything about it.

        Bonds were considered but were unable to be issued on the scale required. During the growth when the capital was required, Fonterra were constantly very close to a 60% gearing ratio, which would’ve triggered breaches in their banking covenants which would’ve restricted the ability to pay farmers for milk. Bonds for value add processing sit as a debt on the balance sheet, so would’ve caused significant issues. They therefore funded growth via retained profit and the issueing of shares to new farmers at a nominal share price (another govt legacy of not letting Fonterra apply a market value share price until 2012)

        I agree that the govt regulations need to catch up and overtake Fonterra. It should be an embaressment to the governments of both hues that Fonterra’s environmental standards makes the MfE look pedestrian. Think about it, Fonterra decided independently that it wanted to implement rules restricting stock access to water in 2011, and then made good on the commitment; yet the MfE keep postponing the same stock exclusion rules for non-fonterra farms and will likely be setting targets circa 2030.

        • Keepcalmcarryon 11.2.1.1

          Yet we know fencing streams is a side issue and nitrogen leeching from urine continues with more irrigation, intensification and 100 kg ha N being tipped on.
          You sound like an apologist and a spin merchant. “Maybe if you lived rurally you would understand “

          • RuralGuy 11.2.1.1.1

            I’m most certainly rural. I’ve got 2200 ha across 7 properties of different land use in 4 regions employing 38 staff. I do approx 600k mskg per year, so have about 3.5mil of my own invested in Fonterra

            Did you happen to read my commentary around a flaw of Fonterra’s creation allowing unchecked intensification? The point I was making, and that you’ve failed to grasp, is that Fonterra set a standard and implemented it, whereas MfE have not done similar.

            You might disagree that the mitigation is insufficient, but quite frankly, I’m not talking about mitigation I’m talking about policy and implementation.

            If you want to seek a N cap for land use, I encourage to advocate for it. But, seen as MfE can’t even organise a set of rules and standards for stock exclusion, I have no confidence that they’d be capable implementing a nutrient capping policy.

    • Ad 11.3

      Thanks Rural Guy.

      Your last paragraph seems a pretty minimum outcome, given the reputation that Fonterra has dragged this country through.

      I honestly want Fonterra to succeed.

      • RuralGuy 11.3.1

        As we all do, what’s often forgotten is that by being New Zealand’s largest exporter that it’s our largest money importer. Treasury did a review in 2012 during a DIRA review, and NZ went from 1st world to 3rd world in most OECD measures if Fonterra’s impact was removed for the treasury books.

        • Keepcalmcarryon 11.3.1.1

          Should be able to look after their local kiwi market then eh, it’s small fry. Probably makes sense not to alienate the people paying for your pollution.

          • RuralGuy 11.3.1.1.1

            Could you advise what pollution from my farms do you pay for? Especially since you think it’s my responsibility that I should subsidise your grocery bill as well.

            • Keepcalmcarryon 11.3.1.1.1.1

              You will have to share some more information for me to answer and I won’t expect you to out yourself on the internet so what if I show an example of the taxpayer paying for cleanup?
              https://www.mfe.govt.nz/more/funding/closed-funds/fresh-start-fresh-water-clean-fund

              You are so right, you own 7 farms and can’t afford to look after the taxpayers cleaning up your mess.

            • tracey 11.3.1.1.1.2

              RuralGuy farmers need city slickers cos we are your consumers. I have enjoyed your posts but am sick of the rural/city divide that Nats and Fed Farmers push.

              Not all farmers are polluters and not all city dwellers are ignorant of the part farmers play in our lives.

              The pre election divide that Nats pushed harms us all.

              As a Green voter I cant change Nat behaviour but given we are told many farmers vote National…

    • Pat 11.4

      “Ultimately, I think what’ll actually happen Fonterra will actually be given more sensible commercial expectations around milk collection and DIRA milk provisioning, and they will get more leeway on suspending and milk for non-compliance then they currently have. In other words, export Fonterra to have reduced levels of regulation so their not hamstrung in chasing haigher value products.”

      K…so if what you foresee actually occurs what do you think would be the likely outcome in regards to supply volume and environmental impact? Would it lead to a reduced herd with a higher operational standard overall or would it simply shift more operations outside the Fonterra umbrella? …or would you advocate for additional/higher compliance requirements in addition for those outside the Fonterra model? (acknowledging MfEs limitations)

      It appears to me that an ability to set production targets against expected demand could only benefit the price regardless of product type but it would also likely impact the viability of a number of operations…..who and how determines?

    • Antoine 11.5

      Great comment RuralGuy. Nice to get some input from someone who actually knows how Fonterra works

      • Ian 11.5.1

        Thanks rural guy for presenting the facts re Fonterra.Hopefully any Govt. Review will take the DIRA issues currently hobbling Fonterra into account and make some sensible changes.

    • tracey 11.6

      Thanks for your thoughtful post. Labour approved Fonterra but they didnt disbandtake over one of the safeguards in ECAN

  12. Gareth Wilson 12

    “It is interesting to contrast Fonterra with a company such as A2, which has put all its eggs into the value-add, intellectual property game. ”

    Sounds great. Could you explain why A2 milk is better than conventional milk?

    • Keepcalmcarryon 12.1

      Diabetes or more specifically a2 not linked to diabetes
      Unlike conventional (a1) milk
      https://www.stuff.co.nz/business/farming/opinion/98523840/study-suggests-link-between-a1-betacasein-and-type-1-diabetes

      • Gareth Wilson 12.1.1

        So A2 milk can help prevent diabetes? That’s really important information for the consumer, so I assume it’s printed on all the bottles.

        • Keepcalmcarryon 12.1.1.1

          Why don’t you go look and tell us

          • One Anonymous Bloke 12.1.1.1.1

            So I checked, and it would be very unwise for the manufacturers to put that on the label.

            The linked article is well beyond my ken, but I can follow its conclusions:

            There is, thus no convincing or probable evidence that the A1 β-casein in cows milk is a factor causing DM-I diabetes…

            There is thus no convincing or probable evidence that the A1 β-casein in cows’ milk is a factor causing CHD.

    • Molly 12.2

      Get yourself a copy of the Devil in the Milk. I found it available at Auckland Libraries.

      This groundbreaking work is the first internationally published book to examine the link between a protein in the milk we drink and a range of serious illnesses, including heart disease, Type 1 diabetes, autism, and schizophrenia.

      These health problems are linked to a tiny protein fragment that is formed when we digest A1 beta-casein, a milk protein produced by many cows in the United States and northern European countries. Milk that contains A1 beta-casein is commonly known as A1 milk; milk that does not is called A2. All milk was once A2, until a genetic mutation occurred some thousands of years ago in some European cattle. A2 milk remains high in herds in much of Asia, Africa, and parts of Southern Europe. A1 milk is common in the United States, New Zealand, Australia, and Europe.

      In Devil in the Milk, Keith Woodford brings together the evidence published in more than 100 scientific papers. He examines the population studies that look at the link between consumption of A1 milk and the incidence of heart disease and Type 1 diabetes; he explains the science that underpins the A1/A2 hypothesis; and he examines the research undertaken with animals and humans. The evidence is compelling: We should be switching to A2 milk.

      A2 milk from selected cows is now marketed in parts of the U.S., and it is possible to convert a herd of cows producing A1 milk to cows producing A2 milk.

      This is an amazing story, one that is not just about the health issues surrounding A1 milk, but also about how scientific evidence can be molded and withheld by vested interests, and how consumer choices are influenced by the interests of corporate business.

      • Gareth Wilson 12.2.1

        Again, I hope all of this information is printed on the bottles.

        • Antoine 12.2.1.1

          Gareth, is your point that these purported health benefits are unsubstantiated?

          A.

          • Gareth Wilson 12.2.1.1.1

            Yes, that’s why the A2 company itself makes no medical claims. Selling a useless product to ignorant people is a way to add value, but it doesn’t seem very sustainable.

        • Simon Louisson 12.2.1.2

          I am not sure the science of A2 is that relevant to this discussion – the point is A2 the company has a product and a market that adds significant value. As a company, A2 has moved away from commodities and added huge value to shareholders.

          • Antoine 12.2.1.2.1

            Do you think it is good to build shareholder value by selling a product that does not do what it is claimed to do?

          • Gareth Wilson 12.2.1.2.2

            You’re right that you don’t need real science for a profitable product. But that means your profitability depends on people continuing to believe the fake science. That’s not certain – not many people mediate under pyramids these days.

      • Keepcalmcarryon 12.2.2

        My understanding is the diabetes link has some science to it, not so sure on the other stuff

    • Jess NZ 12.3

      Yes, studies are showing quite reputably that milk proteins can trigger an autoimmune attack on the cells of the pancreas, resulting in failure to produce insulin. But the science of the negative health impacts of humans eating the milk cows produce for their calves (and is then processed into an interesting supermarket product or even more exciting technological wonder like A2) is far too extensive to even skim 🙂 over here.

      If anyone is interested, you’ll need to start with information from organisations like Physicians Committee for Responsible Medicine http://www.pcrm.org/health/diets/vegdiets/health-concerns-about-dairy-products and follow the trails where they lead. Or the material from Professor Emeritus T. Colin Cambell from Cornell. http://nutritionstudies.org/search/dairy

      Enjoy!

  13. KJT 13

    Be careful of statements about Fonterra, from capital market advocates, who are still shitty that Fonterra’s co-operative structure, prevented them from buying in and making an asset stripping killing. As they have done with so many private and Public companies in New Zealand already.

    This is all going to end in tears. Just like New Zealand’s over reliance on past, single commodity, booms.

    Fonterra having to buy all production, has encouraged farmers to go into debt, and increase production to economic and environmentally unsustainable levels.

    I wouldn’t be surprised if dairy farm debt servicing costs now exceed export profits.
    No one has done a cost benefit analysis, of sacrificing manufacturing and value added exporting, on the alter of increased access for milk powder exports.

    Ultimately, with the EU, North and South America and soon, China able to produce lakes of milk, if they wish, there is always going to be a cap on dairy earnings.

    Not to mention we have already exceeded the environmental limits, of NZ style dairy farming.

  14. Jess NZ 14

    Stepping back from the particular dairy market model for a moment…

    If our ultimate goal is to feed our planet of fellow human beings, feeding natural resources through an animal first is an incredibly inefficient way of doing that and produces that inconvenient waste problem that everybody’s complaining about but nobody wants to have to pay or lose votes to do anything about. (Some animals are raised on land that truly can’t be used for human food, but not the majority. And the majority is killing us, not the loud proud exceptions.)

    If our ultimate goal is to make lots of money off our fellow human beings from ‘value-added products’ then Fonterra’s plan is excellent.

    I know which side of history I want to be on.

  15. smilin 15

    Did Fonterra think that its ego driven backing from the Key govt was going to allow them to become a global monopoly ?
    There’s at least half dozen other world companies that have upped their game since the heady days prior to the share float of Fonterra. That share float basically stuffed any monopoly because of the major food industries like Nestles who sit in their eagles nest with a pulse on everything food and water can now move in on what used to be a closed shop
    So goodbye to the sovereignty of Fonterra being nz owned and controlled and hello to TPPA and whatever multinational consortium comes to take it over
    We have to decide if were are going to allow them to pollute the rest of the country in the process or wake up to the fact that the old imperialists are going to continue to turderate this country for their profits
    Disgusting yes and real

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    . . Lock Down: Day 2 – A photo essay with observations . March 27 – Day 2 of our Strange New World. The Park and Ride near my suburb, usually filled with hundreds of vehicles, had just… four; . . Another drive into Wellington City on a highway nearly ...
    Frankly SpeakingBy Frank Macskasy
    7 days ago
  • How Do You Feel? What Do You Think?
    Fortune's Children: Under extraordinary pressure, the leader of the Government and the leader of the Opposition will each show us what they are made of. Have they been blessed with intelligence, grace, wit, poise, toughness, empathy and humour – and in what measure? More importantly, to what extent have they ...
    7 days ago
  • Landlords are NOT an essential service
    If you’ve ever had the misfortune of having to rent a property on the open market in New Zealand, which is one of the most expensive in the entire world, you’ll likely be keenly aware of just how arrogant and entitled landlords and their real estate agents can be.Unfortunately for ...
    1 week ago
  • A “new Society” post-COVID19 will definitely emerge. The question is: on what path?
    Society-wise, aside from the specific morbidity shall we say of the medically-oriented aspects of this COVID-19 crisis, what is unfolding before the world is in more than one way an instructive study of humanity and reactions to a high intensity, high stress environment in real time. Friends, we are at ...
    exhALANtBy exhalantblog
    1 week ago
  • Raise the Bar: Everything you need to know about the wage subsidy
    Right now low waged and insecure workers are feeling the economic brunt of the looming #Covid19 Recession. In response legal advocate Toby Cooper* and hospitality and worker’s rights advocate Chloe Ann-King, are putting together a series of legal blogs about your employment rights: In this legal blog we outline some ...
    PosseBy chloeanneking
    1 week ago
  • The massacre of prisoners in Modelo jail, Bogota, March 21
    by Equipo Jurídico Pueblos and Gearóid Ó Loingsigh (25/03/2020) An escape plan in question On the night of March 21st and the early morning of the 22nd, the forces of the Colombian state stormed into the Modelo prison in Bogotá, murdering 23 prisoners and injuring 83, in response to the ...
    RedlineBy Admin
    1 week ago
  • We are not America
    When the government banned semi-automatic weapons in response to a terrorist atrocity, gun-nuts were outraged. Mired in toxic American gun culture, they thought owning weapons whose sole purpose was killing people was some sort of "constitutional right", a necessity for "defending themselves" against the government. Now, the Court of Appeal ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • When will we know the lockdown is working?
    Just before midnight on Wednesday March 25, Aotearoa New Zealand entered a countrywide alert level four lockdown. For at least the next four weeks, everyone who isn’t an essential worker is confined to their bubble. We are doing this to stop the explosive growth in people contracting and dying from ...
    SciBlogsBy Siouxsie Wiles
    1 week ago
  • Lock Down: Day 1
    . . Lock Down: Day 1 – A photo essay with observations . Day one of the Level 4 nationwide lock-down (or, DefCon 4 as I sometimes cheekily call it) started at 11.59PM on 25 March. For a moment, most of the nation held it’s collective breath. In that brief ...
    Frankly SpeakingBy Frank Macskasy
    1 week ago
  • A Compelling Recollection.
    Broad, Sunlit Uplands: How those words fired my young imagination! Or, perhaps, it is more accurate to say: how those words fused, in my young mind, with the image printed on every packet of Fielder’s Cornflour. Always fascinated by history, especially modern history, I cannot hear Churchill’s wonderfully evocative words, even ...
    1 week ago
  • The Warehouse – where everyone gets a virus
    . . 24 March 2020 9.46AM Number of covid19 cases in Aotearoa New Zealand: 102 . As of 11.59 on Thursday, most of New Zealand will go into “lock down”. People will be expected not to travel to work; not to socialise; and to stay home. I will not be ...
    Frankly SpeakingBy Frank Macskasy
    1 week ago
  • Aggressive action to address climate change could save the world $145 trillion
    This is a re-post from Yale Climate Connections A respected research group, Project Drawdown, finds that deploying solutions consistent with meeting the Paris climate targets would cost tens of trillions of dollars globally. But crucially, those outlays would also yield long-term savings many times larger than the up-front costs. The new 2020 Drawdown ...
    1 week ago
  • After the Pandemic
    It will pass. What happens next? Not immediately, but longer term. There are many opinions, fewer certainties. Will it “change everything!” as many confidently, and contradictorily predict? In this post I look at how foresight can help bound some of the uncertainties so you can more objectively consider the future. ...
    SciBlogsBy Robert Hickson
    1 week ago
  • Coronavirus – Cuba shows the way
    We’ve been meaning t write something on Cuba and the coronavirus but have just discovered a very good article on the subject in the US left publication Jacobin.  The article looks at how Cuba, a poor country but one where capitalism has been done away with, is leading the way ...
    RedlineBy Admin
    1 week ago
  • Using privacy law to prevent the death penalty
    In 2018, El Shafee Elsheikh and Alexanda Kotey - two British citizens who had purportedly been stripped of their citizenship by the British government - were captured while fighting for Isis in Syria. The British government then conspired to hand them over to the US, and agreed to provide evidence ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • It’s Time For Disaster Socialism.
    Transformers: The disaster of the Great Depression was transformed into a new and fairer society by the democratic socialism of the First Labour Government. The disaster of the Covid-19 Pandemic offers a similar transformative possibility to the Labour-NZ First-Green Government. Seize the time, Jacinda! You will never have a better ...
    1 week ago
  • Skeptical Science New Research for Week #12, 2020
    Tamper with The System? Well, we already are. But there's a difference between accidentally trickling sand into a precision gearbox versus formulating a plan to alter it on the fly with improvements in mind. One action is more or less innocently unscrupulous, the other amenable to earning an easy ...
    1 week ago
  • Avoidable hospitalisations: Helping our health system get through COVID-19
    Associate Prof George Thomson, Louise Delany, Prof Nick Wilson While it is possible that New Zealand can use intense public health controls to eradicate COVID-19 from the country – we must also plan for other scenarios where thousands of New Zealanders are sick – including many urgently hospitalised.1 Better resilience ...
    SciBlogsBy Public Health Expert
    1 week ago
  • Raise the Bar: 10 questions to ask your employer proposing redundancy
    Kia ora my name is Chloe Ann-King* and I am the founder of Raise the Bar, a campaign and non-profit that gives free legal aid, advocacy and tautoko to hospitality workers in Aotearoa. Right now all over our country hospo workers are being fired at will, having shifts cut or being ...
    PosseBy chloeanneking
    1 week ago
  • An equitable way to support business
    The Herald reports that the government is planning to lend billions of dollars to large businesses to keep them operating during the pandemic. As with mortgage relief, this is necessary: we need companies to stay in business, to reduce the economic damage and help things get restarted again when this ...
    No Right TurnBy Idiot/Savant
    1 week ago
  • Hard News: Together Alone
    We're about to do something unprecedented as a nation. We hope that by taking this extraordinary action before a single life in New Zealand has been lost to the deadly novel virus we will save tens of thousands of lives. Our  lives. We'll do it together, in households, in isolation ...
    1 week ago
  • Why timing is everything: ‘A time to refrain from embracing’ starts today
    “There is a time for everything,    and a season for every activity under the heavens.”So writes the author of Ecclesiastes, a book in the Old Testament that’s counted as a ‘wisdom’ book and written as if by an unnamed king of Jerusalem. But who would have thought there would be a time ...
    PunditBy Tim Watkin
    1 week ago
  • Dealing with the Covid-19 Tsunami.
    I was surprised when the prime minister described the Economic Response to Covid-19 package as the ‘largest peacetime government spend in New Zealand's history’. Reflecting – checking through history – I realised that the term ‘spend’ was crucial and the package had no income tax cuts. Even so, it has ...
    PunditBy Brian Easton
    1 week ago

  • Further measures to support businesses
    The Government will be introducing legislation to make changes to the Companies Act to help companies facing insolvency due to COVID-19 to remain viable and keep New Zealanders in jobs. The temporary changes include: Giving directors of companies facing significant liquidity problems because of COVID-19 a ‘safe harbour’ from insolvency ...
    BeehiveBy beehive.govt.nz
    19 hours ago
  • Govt’s COVID plan, economic strength recognised
    The Government’s plan to cushion the blow of COVID-19 by supporting incomes, jobs and businesses, and position the economy to recover has been backed by another international report. International credit rating agency Moody’s today reaffirmed its highest Aaa credit rating on New Zealand, saying the economy is expected to remain ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • Funding certainty for sports through COVID-19
    National sports organisations have been given certainty of funding to ensure they can remain viable through the COVID-19 pandemic, Sport and Recreation Minister Grant Robertson announced today. “The global spread of COVID-19 has had a significant impact on sport and recreation in New Zealand, including the cancellation or postponement of ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Butchers now allowed to process pork
    Changes have been made to allow butchers to process pork, only for supply to supermarkets or other processors or retailers that are open, Agriculture Minister Damien O’Connor has announced. “We carefully weighed the risk of allowing butchers to open their shops for retail customers, but the risk of spreading COVID-19 ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Essential workers leave scheme established
    Essential workers who take leave from work to comply with public health guidance are being supported with a leave scheme to ensure they will continue to receive income, say the Minister of Workplace Relations and Safety Iain Lees-Galloway and Minister for Social Development, Carmel Sepuloni. A number of essential businesses ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Govt WhatsApp helps share COVID-19 information
    A Government WhatsApp channel has been launched to help make information more easily accessible and shareable in the fight against COVID-19. Govt.NZ, which is free to use on any mobile device, will carry information and news for the public, businesses, healthcare providers, not for profits and local government. It can ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Managed departure plan for stranded foreign nationals enables safe, orderly exit
    The Government has announced a plan to enable the safe, orderly exit of tens of thousands of stranded foreign nationals from New Zealand during the current COVID-19 Alert Level 4 restrictions, Deputy Prime Minister and Foreign Minister Winston Peters has said. “When we moved into lockdown a week ago, the ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government delivers COVID-19 support to GPs and Pharmacies
    Health Minister Dr David Clark says the Government is delivering on its commitment to support general practice doctors and nurses, and pharmacies on the front-line of our fight against COVID-19. "For us to overcome COVID-19, we need community health services such as general practice and community pharmacy to step up ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Susan Thomas the new Chief High Court Judge
    Justice Susan Thomas has been appointed Chief High Court Judge, Attorney-General David Parker announced today.  She replaces Justice Geoffrey Venning who has resigned from the position.   David Parker paid tribute to Justice Venning, who he said had stewarded the High Court very capably over the last five years.   “On behalf ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Business Finance Guarantee – applications open
    Businesses can start applying to their banks for loans under the Business Finance Guarantee Scheme set up to support the New Zealand economy during the COVID-19 pandemic. “We’re moving quickly to protect New Zealand businesses, jobs and the economy during this unprecedented global economic shock,” Finance Minister Grant Robertson said. ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Work starts on ways to fast-track consents to boost recovery from Covid-19 downturn
    Work is underway looking at measures to speed up consents for development and infrastructure projects during the recovery from COVID 19, to provide jobs and stimulate our economy.  Environment Minister David Parker said the COVID-19 pandemic is a serious global crisis that will have a wide ranging and lasting impact ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Advance payments to support contractors
    Advance payments will be made to transport construction industry contractors to retain the workforce and ensure it is ready to quickly gear up to build projects which will be vital to New Zealand’s COVID-19 economic recovery, Transport Minister Phil Twyford announced today. He said keeping the workforce required to build ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government seeks infrastructure projects
    The Government has tasked a group of industry leaders to seek out infrastructure projects that are ready to start as soon as the construction industry returns to normal to reduce the economic impact of the COVID-19 pandemic, Economic Development Minister Phil Twyford and Infrastructure Minister Shane Jones say. The Infrastructure ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Health system scaled up to prepare for COVID-19
    Work to scale up the health system in preparation for COVID-19 was today outlined by Health Minister David Clark, as he reported back to the new Epidemic Response Committee. “We are well placed to contain the spread of COVID-19. We have taken early and decisive action at our borders, and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Essential media COVID-19 guidelines refined
    The Government is refining its COVID-19 essential business guidance to include the distribution of news publications for communities which are hard to reach. The Minister of Broadcasting, Communications and Digital Media, Kris Faafoi, said the move was in recognition of the importance for New Zealanders who might be harder to ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Supermarkets able to open on Easter Sunday
    The Government is ensuring supermarkets can open on Easter Sunday so we can buy groceries, but stay closed on Good Friday allowing workers to take a break. This provides a balanced approach and ensures we avoid large queues that two days closure may cause. “Supermarkets will be able to open ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Zealand defence personnel conclude mission at Taji
    Following the successful conclusion of the Building Partner Capacity (BPC) mission at Taji, New Zealand defence personnel are returning to New Zealand from Iraq, in accordance with the Cabinet decision made in June 2019, Foreign Affairs Minister Winston Peters and Defence Minister Ron Mark announced today. “New Zealand is very ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • State of National Emergency extended
    The State of National Emergency to help stop the spread of COVID-19 has been extended for a further seven days, Minister of Civil Defence Peeni Henare said. The initial declaration on March 25 lasted seven days and can be extended as many times as necessary. “Since we went into isolation ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Strong Govt books support ‘go hard, go early’ response
    New Zealand’s ability to go hard and go early in the fight against COVID-19 has been underpinned by strong Government finances and the growing economy heading into this global pandemic, Finance Minister Grant Robertson says. The Treasury today released the Crown financial statements for the eight months to the end ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Christchurch Hospital Hagley ICU to open to support COVID-19 response
    Health Minister Dr David Clark says 36 new intensive care beds at Christchurch Hospital’s new Hagley building are being fast tracked so they are available for treatment of COVID-19 patients.   The Ministry of Health is working with contractor CPB and Canterbury DHB to enable access to the hospital’s ICU, ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government supports Air NZ freight flights
    The Government has fast-tracked up to $1 million to help Air New Zealand move urgent freight to and from New Zealand, with the first flight to Shanghai leaving tonight, Transport Minister Phil Twyford announced today. Phil Twyford says it’s crucial that trade in vital goods such as medical supplies and ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Tariff concessions on COVID-19 related products
    New Zealand will temporarily remove tariffs on all medical and hygiene imports needed for the COVID-19 response. Trade and Export Growth Minister David Parker and Commerce and Consumer Affairs Minister Kris Faafoi said today that the New Zealand Customs Service will apply tariff concessions to all diagnostic reagents and testing ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Clarification of modification to wage subsidy scheme
    Minister of Finance Grant Robertson has clarified that the changes to the wage subsidy scheme announced yesterday mean that employers should be passing on the full subsidy to workers, except in the case where the person’s normal income is less than the level of the subsidy. “We still want employers ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Face masks flowing to DHBs
    Medical face masks from the national reserve supply are now being distributed to District Health Boards, while at the same time local production is being ramped up. Yesterday more than 640,000 masks were sent to DHBS – that is an immediate two week supply, with more to follow in coming ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • COVID-19: Further steps to protect New Zealanders’ jobs
    The Government has made modifications to the wage subsidy scheme to ensure people don’t lose their jobs during the national lockdown. These changes will soften the impact of COVID-19 on workers, families and businesses, and position them to exit the lockdown and look to recovery, Finance Minister Grant Robertson says. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Tax relief for Mycoplasma Bovis farmers
    Farmers whose herds were culled in response to the outbreak of Mycoplasma bovis will be able to minimise the tax treatment of their income in some circumstances. Revenue Minister Stuart Nash says Cabinet has agreed to change the law. It means farmers may be eligible to spread their income over ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • $27 million for NGOs and community groups to continue providing essential services
    A $27 million dollar package, effective immediately, is being provided to social sector services and community groups to ensure they can continue to provide essential support to communities as we stay at home as a nation to stop the spread of COVID-19, Minister for Social Development Carmel Sepuloni announced. “At ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Statement on guilty plea of March 15 terrorist
    “The guilty plea today will provide some relief to the many people whose lives were shattered by what happened on March 15,” Prime Minister Jacinda Ardern said. “These guilty pleas and conviction bring accountability for what happened and also save the families who lost loved ones, those who were injured, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • COVID-19 updates
    The Prime Minister is holding daily press conferences to update New Zealanders on the Government's response to COVID-19. Links to videos and transcripts of these updates below. These transcripts also include All of Government press conferences led by Director Ministry of Health's Director-General of Health Dr Ashley Bloomfield. 25 March: Live update from the Prime ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Police numbers break through 10,000 mark
    Frontline Police numbers have broken through the 10,000 mark for the first time in history as officers step forward to keep the community safe during the COVID19 lockdown. “Two Police graduations in Auckland and Wellington in the past week have been conducted in unprecedented circumstances,” Police Minister Stuart Nash said. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Urgent tax measures for economic recovery
    Urgent legislation has been passed to support the package of economic and social measures needed to recover from the impact of the coronavirus outbreak. “The COVID-19 Response (Taxation and Social Assistance Urgent Measures) Bill will cushion New Zealanders from the worst economic impacts of the COVID-19 outbreak,” said Revenue Minister ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Further support for farmers and growers as drought persists
    From tomorrow, Government support for farmers and growers affected by drought will be expanded and extended across the country, with access to Rural Assistance Payments (RAPS) available throughout the North Island, parts of the South Island and the Chatham Islands, Social Development Minister Carmel Sepuloni announced. “These challenging conditions have ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • COVID-19: Temporary changes to Education Act
    Parliament has passed amendments to legislation that give the Secretary of Education stronger powers to act in the fight to limit the spread of COVID-19, Education Minister Chris Hipkins said today. “They are part of a suite of changes passed under the COVID-19 Response (Urgent Management Measures) Legislation Bill,” Chris ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Canada, Australia, Chile, Brunei and Myanmar join NZ and Singapore in committing to keeping supply a...
    Canada, Australia, Chile, Brunei and Myanmar have joined forces with New Zealand and Singapore by committing to keep supply chains open and remove any existing trade restrictive measures on essential goods, especially medical supplies, in the face of the Covid-19 crisis.  Trade and Export Growth Minister David Parker today welcomed ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • COVID-19: Rent increase freeze and more protection for tenants
    Immediate freeze on rent increases Tenancies will not be terminated during the lock-down period, unless the parties agree, or in limited circumstances Tenants who had previously given notice can stay in their if they need to stay in the tenancy during the lock-down period Tenants will still be able to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Working together to protect businesses and workers
    As New Zealand unites to lock-down in the fight against COVID-19, the Finance Minister is urging all businesses and workers to stay connected over the next four weeks. “We understand the extreme pressure many businesses are under right now. I know most business owners think of their workers as family ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • State of National Emergency declared to fight COVID-19
    A State of National Emergency has been declared across the country as the Government pulls out all the stops to curtail the spread of COVID-19. “Today we put in place our country’s second ever State of National Emergency as we fight a global pandemic, save New Zealanders’ lives and prevent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister’s statement on State of National Emergency and Epidemic Notice
    Mr Speaker I wish to make a Ministerial Statement under Standing Order 347 in relation to the recent declaration of a State of National Emergency. Having considered the advice of the Director Civil Defence Emergency Management, the Minister of Civil Defence declared a State of National Emergency for the whole of ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Deadline for domestic travel extended
    People needing to travel on domestic flights, trains and Cook Strait ferries to get home before the country moves into level 4 lock-down tomorrow night will be able to continue using the passenger services until midnight on Friday, Transport Minister Phil Twyford said today. Domestic passenger services, particularly ferries, have ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Mortgage holiday and business finance support schemes to cushion COVID impacts
    The Government, retail banks and the Reserve Bank are today announcing a major financial support package for home owners and businesses affected by the economic impacts of COVID-19. The package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been ...
    BeehiveBy beehive.govt.nz
    2 weeks ago