While farmers near urban areas might benefit from the promise of new dairy manufacturing enterprises, more marginal or distant farms might struggle. The dominant position of Global Dairy could lead to domestic prices forced up by international returns. Such increases would be visible, given the certainty of close consumer scrutiny of the domestic market. The provisions of the Commerce Act would also apply to the new company. Given the tiny share of milk destined for the domestic market, Global Dairy should have no need to allow such price rises to occur.
Any monopoly carries the risk that an inefficient bureaucratic culture develops.
With just a single company it will be harder for farmers to establish a measurable performance benchmark. There is a gamble in having virtually all the nation's dairy industry under one umbrella, but the Government is correct to argue that the potential returns outweigh the risk. The benefits will touch all New Zealanders through a stronger economy and improved employment opportunities. Integral to this boost is a move away from a dairy regime where the participants fight each other.