American dairy interests have joined the lobbying against Fonterra's proposal to allow share trading among its farmer shareholders.
In a letter to Agriculture Minister David Carter, the US Dairy Export Council says it views the share trading proposal as an attempt to lock in Fonterra's near-monopoly position in New Zealand and use that dominance to capture an unfair share of foreign dairy markets.
Some 10,500 dairy farmers who supply milk to Fonterra are voting on the share trading proposal, the third and final stage of the co-operative's capital restructuring plan.
The outcome will be known next week, when Fonterra holds a special meeting.
If it gets the 75% support required, the farmers will buy and sell shares among themselves. At present, they have to buy shares from the company to match their milk supply, then sell them back when they leave the co-op.
US opposition will be 'strengthened'
The US Dairy Export Council, which represents interests including farmers and processors, says the move would negate the Dairy Industry Restructuring Act, which was designed to allow some measure of competition for Fonterra after its formation.
The letter, from council president Thomas Suber, also raises the concern that Fonterra's share plan appears to have the support of the Government.
Mr Suber warns that the move will strengthen opposition in the US dairy industry to the New Zealand dairy sector being included in any deal that emerges from the current Trans-Pacific free-trade negotiations.
In New Zealand, the proposal has raised concerns with some of Fonterra's smaller competitors, in particular, the Open Country dairy company, which says it will make it harder for farmers to leave Fonterra if they wish to sign up with another processor.
Fonterra argues that it doesn't change the current open entry and exit provisions, allowing farmers to buy into the co-op or sell up, as they wish.
