Dairy Industry Restructuring Act

Issued 27 August 2002-03 / 029

Dairy Industry Restructuring Act: Commission receives determination application from Independent Dairy Producers Ltd

The Commerce Commission has received an application from Independent Dairy Producers Limited (IDP) for a determination under the Dairy Industry Restructuring Act (DIR Act) 2001 in respect of the price IDP has been required to pay the Fonterra Co-operative Group (Fonterra) for raw milk.

IDP is a small, privately owned dairy company that processes and supplies the "Premium Milk" brand in the Auckland area.

Under section 122 of the DIR Act, the Commission has notified Fonterra that the application has been received. Section 122 states the Commission must request Fonterra's comments on the application not later than 10 working days after receiving notification from the Commission.

Under section 123 of the Act, the Commission will then decide whether or not to determine the matter. If the Commission decides to determine the matter, the Commission must complete a determination as soon as practicable.

Background Section 120 of the Dairy Industry Restructuring Act 2001 states:

Determination to resolve conflict (1) A person may apply to the Commission for a determination if the person has a dispute with the new co-op (Fonterra) about the application of this subpart (Subpart 5) or regulations made under section 115. (2) Despite subsection (1), the Commission may reject an application, and return it to the applicant (and do no more in relation to the application), if, in the Commission's opinion, - (a) the dispute is not genuine or is vexatious or frivolous; or (b) the applicant does not have a direct financial interest in the matter to which the application relates; or (c) the applicant has not made a reasonable attempt to settle the matter with new co-op; or (d) the Commission has made a determination, or is currently considering an application, on the same matter. (3) The Commission may consider related applications together (4) An application under subsection (1) must be made within 3 years after the matter giving rise to the dispute arose.

Subpart 5 of the DIR Act relates to the regulation of dairy markets and obligations of Fonterra. The purpose of Subpart 5 is to promote the efficient operation of dairy markets in New Zealand.

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