Milk subsidy — for now

Press, 17 September 1976, Page 3

Milk subsidy — for now

PA Auckland! The Government has no immediate intention of removing the remainder of the consumer subsidy on town milk, Mr J. B. Bolger, the Parliamentary Under-Secre-tary to the Minister of Agriculture and Fisheries, said yesterday. During the annual conference of the Auckland branch of the Dairy Factory Managers’ Association, he was asked by the general manager of the Rangitaiki Plains Dairy Company (Mr R. A. Dennis) when the manufacturing sector of the dairy industry could expect to see the end of the subsidy, so as to allow free competition for dairy products on the New Zealand market.

Mr Bolger said the point was valid insofar as the town milk industry did tend to create distortions in providing a product below cost.

However, there must be a supply of fresh milk available to all New Zealanders.

The manager of the Kaip-; ara Diary Company (Mr K. Burnett) reminded Mr Bolger that successive Governments had examined the possibility of amalgamating the town' milk industry with the dairy manufacturing industry. He asked whether the Government would consider lifting some restrictions on dairy factories, so that they could sell milk on the local market.

Mr Bolger said he had ■ recently told the town milk industry that unless it sup- , plied a greater range of ■ products, the Government would have to reconsider this question. There had been an immediate response. ; While it was true that the dairy industry was geared ■ for export production,, the domestic market consumed

25 per cent of total dairy production and was therefore an important sales point, he said. Only in recent years had some dairy companies attempted to promote sales of new varieties of butter with a lower fat content and greater spreading ease. It was clear that' the dairy industry would have to consider seriously marketing a wider range of dairy products on the local market and give more attention to product promotion and packaging.