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DIRA regulates New Zealand's dairy industry

The key aspects of the New Zealand dairy industry that the DIRA regulates that are explained on this page are:

Herd testing and the dairy core database

The dairy core database holds data on cattle to help the industry continuously improve livestock. Following public consultation in 2012 and 2014, the dairy core database was transferred to Dairy NZ's Dairy Industry Good Animal Database (DIGAD).

Dairy NZ's information about DIGAD

The data for the database is gathered by certified herd testers. The DIRA provides for the certification regime.

Register of herd testers and bodies approved to certify testers

Dairy Industry (Herd Testing and New Zealand Dairy Core Database) Regulations 2001

Dairy export quota management system

New Zealand administers quota for bovine dairy exports to the United States of America (USA), the United Kingdom (UK), the European Union (EU), Japan, and the Dominican Republic. Quotas enable prescribed quantities of New Zealand dairy products to receive beneficial tariff rates into these markets.

Dairy export quota is allocated by the Ministry for Primary Industries (MPI) in accordance with the DIRA. The DIRA requires quota to be allocated to applicants, based on the proportion of bovine milk solids collected from New Zealand dairy farmers.

The method of allocation is being reviewed.

Find out about the review of how dairy export quota is allocated

2023 consultation on the review of how dairy export quota is allocated in New Zealand

Proposed Changes to Dairy Export Quota Allocation – Cabinet paper [PDF, 858 KB]

Appendix One: Regulatory Impact Statement: Allocation of dairy export quota [PDF, 1.4 MB]

Activities of Fonterra

In 2001, the DIRA overrode the merger provisions of the Commerce Act 1986 to enable the merger of the 2 largest dairy cooperatives and the New Zealand Dairy Board. The merger resulted in the formation of Fonterra. At the time of its formation, Fonterra collected 96% of all bovine milk solids produced by dairy farmers in New Zealand.

Given Fonterra’s large market share, DIRA introduced Fonterra-specific regulation to promote the efficient operation of dairy markets in New Zealand by ensuring that New Zealand markets for dairy goods and services are contestable.

Following a series of substantial reforms in 2012, 2020, and 2022, the DIRA now provides for the regulation of matters relating to:

  • the switching of the milk supply by dairy farmers between Fonterra and other processors
  • the trading of Fonterra shares by dairy farmers
  • the governance and oversight of Fonterra’s base milk price calculation
  • the terms on which some dairy processors can purchase milk from Fonterra.

Find out more

Farmgate milk price information – Fonterra

Commerce Commission's dairy page

Subpart 5A of DIRA – NZ Legislation

Dairy Industry Restructuring (Raw Milk) Regulations 2012 – NZ Legislation

MPI business units