Fonterra's financial woes are being blamed on the way the cooperative was set up.
It's expecting a loss of up to $675 million this financial year, after massive write-downs of its assets.
Regional Economic Development Minister, Shane Jones, says Fonterra's management and board are to blame.
However, agricultural commentator Allan Barber told Kate Hawkesby they have inherited a situation that was avoidable many years ago.
He says overseas marketing of the product should've been part of a separate vehicle.
“The present board and management have inherited a difficult situation because of decisions made under the previous leadership.”
Barber says international companies like Danone and Nestle were set up to be food marketers.
“ Fonterra was set up to be a milk processor that wanted to be a food marketer as well, but they have founds has it's far too expensive.”