Fonterra cheesed off

Fonterra has announced it will appeal the NZ Commerce Commission’s latest ruling in the dispute between the company, The Grate Kiwi Cheese Company and the Kaimai Cheese Company.

Fonterra’s Milk Supply Director Barry Harris says that it isn’t fair that Fonterra farmers be exposed to an unnecessary cost while a new regulatory framework for determining the regulated milk price is put in place.

“The raw milk regulations cost each of our farmers around $1000 a year. This is money that they can’t afford and the Commerce Commission decision opens up eligibility for this milk further. This is an important principle that we have to defend. Otherwise it could potentially cost our suppliers even more,” Harris says.

In a statement, Fonterra says it intends to appeal the determination on the grounds that:

“First, the Commission’s decision that an independent processor does not need to process the raw milk. Fonterra believes this is not consistent with the purpose of the Dairy Industry Restructuring Act.

“Second, the Commission determined that the Regulations require Fonterra to deliver raw milk to any address nominated by the independent processor ordering the milk. This is inconsistent with the language and purpose of the Regulations.

“Third, the Commission determined that Fonterra breached the Regulations by not supplying raw milk to Kaimai and Grate Kiwi. This is not correct. Fonterra did supply milk.”

“Finally, Fonterra is challenging the Commission’s order that Fonterra pay compensation to Kaimai and Grate Kiwi. Fonterra did supply milk. The Commission has failed to apply normal principles for the calculation of damages.”

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