None of the proposed changes to the Dairy Industry Restructuring Act will reduce the retail price of milk, Federated Farmers dairy chairman Willy Leferink says.
Consultation has opened on the Government's proposed response to reviews of Fonterra's farm gate milk price setting and the raw milk regulations, with submissions closing on February 24.
Mr Leferink was concerned there was a perception farmers got all of the value from retail milk sales.
"I can tell you our share in a one-litre carton of retail milk is around 360 millilitres. If someone's skimming the cream, I'd suggest looking harder at the wholesale and retail ends.
"How come Karori New World can sell two litres of milk for $3 but another New World sells an identical bottle for $3.72?
"That's where the margins are, instead of the farmer who produces the milk in the first place. So what people need to really ask of the Government and of proposed changes to the DIRA is this: where is the domestic competition? Not just at the supermarket but for farmer's milk itself," he said.
Precious few of the processors who took the milk bottled it and then put it on to the shelves of supermarkets or dairies.
Too few of those processors got milk from the farm gate and competed locally as they did internationally. "We really need to know why," Mr Leferink said.
While there has been criticism milk was becoming unaffordable for many families, Fonterra chairman Sir Henry van der Heyden said last week the proposed changes would hinder rather than help New Zealanders get access to affordable milk.