Fonterra Cooperative Group breached the Dairy Industry Restructuring Act (Dira) by imposing less favourable terms on farmers who had previously supplied the failed New Zealand Dairies, the Supreme Court has confirmed. Under the growth contract, the farmers were entitled to 5 cents less per kilogram of milk solids than the contract milk price and bought 1000 Fonterra shares but couldn't "share up" - become fully share-backed - in their first year of supplying Fonterra. Fonterra appealed the ruling to the Court of Appeal, which rejected it in 2016 and this year to the Supreme Court. Chief Justice Elias and Justice Glazebrook agreed that the farmers counted as new entrants and that Fonterra had breached s106 of Dira. Justice William Young accepted Fonterra's argument that the farmers were not share-backed suppliers, but instead contract suppliers, and s106 of Dira does not cover contract suppliers.

Source: Otago Daily Times December 20, 2017 23:03 UTC