European ban on NZ butter 'very temporary'

The European Union's ban on the import of New Zealand butter is "a very temporary situation", its agricultural spokesman Michael Mann said today.

Nearly a third of the nation's butter exports have been blocked by the EU decision, which came after the European Court of Justice last Tuesday ruled parts of regulations governing New Zealand's butter imports were invalid.

Exports worth about $264 million, or about 28 per cent of New Zealand's butter shipments, are affected.

Mr Mann told National Radio today: "We've already started the ball rolling to bring them [New Zealand] into line with the European Court's ruling.

"But, unfortunately ...while we prepare the rules, we've had to suspend imports, which means that there are no imports for the time being."

Fonterra executive Philip Turner is heading to Europe today in an effort to have the suspension lifted.

Mr Turner, Fonterra's director of strategy, government and trade, Philip Turner said he was not surprised at the ruling but that the decision to suspend exports was surprising.

"What they're saying is the court has shone a spotlight on a mistake in the drafting of the rules around that trade in Europe and they need to be looked at," Mr Turner told National Radio.

"We will be putting it to the commission through the New Zealand Government that the import licensing question needs to be sorted out, and pretty damn quickly.

"The longer-term issue about how they rewrite the rules to conform to the European Court ruling...is going to take much longer, probably a matter of months, and we'll be working with them on helping them to do that.

"But we think business as usual should continue until the new rules are put in place."

New Zealand had about a month's supply of butter stocks in Europe and Mr Turner hoped the suspension issue could be resolved before it ran out.

Trade Minister Phil Goff said he had written to Mariann Fischer Boel, the European Agriculture Commissioner, expressing concerns over the "serious implications" of the suspension for New Zealand. He planned to speak to her tonight.

"Obviously what we'd ideally like them to do is not to pass the regulation suspending the butter imports while they sort the regulatory problem out," Mr Goff said.

The response from Brussels on Friday had revealed it had a different interpretation of the court decision.

"They read the court decision as taking away the validity of the import licence and therefore the legality of the import and therefore they have to stop it.

"Fonterra and the New Zealand Government read it the other way and say there's nothing in the court decision that says that you have to suspend the trade while you fix the regulations."

Mr Goff said he would be trying to get the European Commission to allow the trade to continue while the matter was sorted out but believed there was only a "slim chance" the EC would agree.

A second approach would be to ask for the regulations to be re-drafted as quickly as possible in consultation with New Zealand "so that the trade can resume as quickly as possible".

A change in regulations might also require a change to New Zealand legislation or regulations, which would also take time.

Mr Goff said he hoped to settle the issue from New Zealand but he was prepared to fly to Europe if necessary.

- NZPA