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The dairy sector in New Zealand

Extending the boundaries
Dairy industry Business innovation New Zealand
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The Productivity Commission commissioned this research into New Zealand's dairy industry. This paper looks at the economic significance of the dairy industry, the regulatory environment, competition, competing corporate strategies, competing organisational forms and future challenges.

Challenges for the dairy sector:

  • New Zealand’s Zero Carbon Plan requires the agriculture sector to cut greenhouse gas emissions by 43 - 60% by 2050.
  • Synthetic products could replace traditional production due to lower carbon emissions during processing and longer shelf-life.
  • The dairy sector has overcome a number of challenges in the past and is expected to continue to do so.

Lessons from the dairy industry:

  • The government backing winners may work sometimes, however it’s a risky strategy.
  • As Jack Mintz, Fellow at University of Calgary School of Public Policy puts it, “governments aren’t great at picking winners but losers are great at picking governments”.
  • The market will determine winners. A key lesson from the dairy sector over the last twenty years is that the sector has performed well where the government has removed barriers to entry and innovation and promoted competition.



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