EU Attack on STEs a Diversionary Tact

16 December 2005
Media Release

EU Attack on STEs a Diversionary Tact, says Fonterra

Allegations by the EU Commission that New Zealand has an STE (State-Trading Enterprise) in the dairy sector are misleading and diversionary, says Philip Turner, Director of Strategy, Government and Trade for Fonterra.

“The EU appears to be seeking to distract attention away from the main issue in the agriculture negotiation, which is the commitment to substantial improvement of market access”, says Mr Turner.

“In comments and press material over the last two days, the EU appears to be suggesting that Fonterra is an STE and somehow enjoying subsidised support.

“Both suggestions are untrue.

“The Commission seems to be living in the last century. “Fonterra is not a State Trading Enterprise, and is not notified as such to the WTO.

“The Commission may be confusing us with the New Zealand Dairy Board, which used to have exclusive rights to export dairy products from New Zealand. This right was repealed in 2001. It is now possible in New Zealand for any company – local or foreign - to collect, make and export dairy products.”

The Fonterra Cooperative Group is a wholly privately-owned dairy cooperative. It has no government support and competes almost entirely on the world market. “Our competition includes large dairy cooperatives in Europe and the US which operate very similarly to the way we do.”

Fonterra currently manages access to certain New Zealand-only quotas on behalf of New Zealand’s dairy farmers, in an arrangement which is due to expire from 2007.

“Rather than chasing rabbits down holes, we look forward to the EU getting back to the core business of helping to grow the world dairy market through making real improvements to market access and eliminating all export subsidies as soon as possible”, concluded Mr Turner.

ENDS

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