Dairy sector – extending the boundaries
As part of its frontier firms inquiry, the Productivity Commission asked TDB to investigate a pillar of the New Zealand economy – the dairy sector. Our paper looks at the economic significance of the industry, the regulatory environment, the extent of competition and the different corporate strategies and organisational forms of the companies in the sector. The paper looks at the effectiveness of past governments’ strategies of backing Fonterra as a potentially world-leading frontier firm and what has happened when barriers to entry have been removed in the sector, with new companies able to enter, innovate and compete with the “national champion”. Who has proved better placed to pick winners in the dairy sector, the government or the market?
Featured in the TDB Digest March 2021