Greens press for Select Committee inquiry into milk pricing

It’s disappointing that the Commerce Commission has declined to initiate a full price control inquiry into the price of milk, Green Party consumer affairs spokesperson Sue Kedgley said today.

The Commerce Commission today announced it would not hold an inquiry into the price of milk after reviewing complaints that milk supplier Fonterra had been using its position of market dominance to set unfairly high milk prices.
“Now that the Commerce Commission has passed the buck, it is up to Parliament to resolve the issue of the virtual monopoly Fonterra exercises in the domestic milk market, and the effect this has on milk prices,” said Ms Kedgley.

“I will now be pressing for a full inquiry into the legislation and regulations relating to the domestic supply of milk in the Commerce Select Committee.

“The Commerce Commission appeared to be looking for an excuse not to initiate a full price inquiry, and found one in the fact that an inter-departmental body was reviewing milk regulations in New Zealand.

“In our view, it is unacceptable for a company that has a monopoly on the supply of raw milk to other processors can set the price of milk in New Zealand.

“The price of milk should be set by an independent body, not by the monopoly supplier,” Ms Kedgley said.

Ms Kedgley pointed out that the Commerce Commission has confirmed that Fonterra has a monopoly on the supply of raw milk to other processors, and that there is very little competition in the supply of fresh processed milk to retailers.

“I am surprised the Commerce Commission appears to be unconcerned about the lack of competition in the domestic milk market.”

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