Fonterra Appeals Commerce Commission Ruling

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

03/07/09 “It is not fair for Fonterra farmers to be exposed to an unnecessary cost while a new regulatory framework for determining the regulated milk price is put in place,” said Fonterra Milk Supply Director Barry Harris.

“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.”

Fonterra is appealing the determination on the following grounds:

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.