Commerce Commission To Determine Dispute

Commerce Commission To Determine Dispute

The Commerce Commission has decided to determine a dispute between The Grate Kiwi Cheese Company Limited (Grate Kiwi) and Fonterra Co-operative Group Limited (Fonterra) about the interpretation and application of regulation 4(1) of the Dairy Industry Restructuring (Raw Milk) Regulations 2001 (the Raw Milk Regulations).

The two parties have been unable to agree on the terms under which Grate Kiwi is able to access raw milk from Fonterra under the Raw Milk Regulations during the 2008/09 season.

Grate Kiwi began grating and blending cheese for the New Zealand market in 1991. It currently specialises in providing grated cheese predominantly for the food service market, and states that it intends over time to expand into processing raw milk into cheese.

The Commission's decision (Decision No. 647) to determine the dispute is available on the Commission's website, www.comcom.govt.nz under Industry Regulation /Dairy Industry/Applications for Determination

A copy of Grate Kiwi's application to the Commission, and Fonterra's response to the application, are also available on the Commission's website.

On 30 July 2008 the Commission also decided (Decision No. 646) to determine an application for dispute from Kaimai Cheese Company Limited (Kaimai). The underlying issues in dispute in the applications from both Kaimai and Grate Kiwi are related and the Commission has decided it is appropriate to consider the applications together.

The Commission is required to complete its determination as soon as practicable. It is anticipated that an indicative timeframe for completion of this determination will be published shortly. This will incorporate an opportunity for interested parties to make a submission to the Commission. Any person who is likely to have an interest in the matter may register their interest by emailing dairy@comcom.govt.nz or write to:

Kaimai/Grate Kiwi Determination
Commerce Commission
P O Box 2351
Wellington

Background
The Commission has both an enforcement and adjudication role under Subpart 5 of Part 2 of the Dairy Industry Restructuring Act 2001 (DIR Act).
The purpose of Subpart 5 of Part 2 is to promote the efficient operation of dairy markets in New Zealand. The DIR Act provides for the regulatory and structural reform of the dairy industry. In relation to the dairy industry, the Commission:
provides determinations on disputes with Fonterra about the application of Subpart 5 of Part 2 of the DIR Act or any regulations made under section 115 of the DIR Act; and
undertakes investigations in relation to Subpart 5 of Part 2 of the DIR Act.
In addition, the dairy industry is subject to the provisions of the Commerce Act and the Fair Trading Act.

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