'Illegal' exports may have cost Kiwi Dairies money

Illegal milk powder exports would have added no value to the bottomline profit at Kiwi Dairies and may even have cost the co-operative, its former chief executive Craig Norgate says.

An internal investigation found that Kiwi was probably worse off because it earned no more from unauthorised sales than it would have got from selling to the Dairy Board.

And exports outside the official regime did not count towards its proportional holding in the board.

"In addition to being a member of the Dairy Board, Kiwi owned 40 per cent of it," Norgate said. "The last thing Kiwi wanted to be doing was to be working around its own system."

Accounting firm KPMG concluded during the Fonterra investigation that the valuation Kiwi Dairies took into the industry merger process was unaffected by the "Powdergate" affair.