Commission to investigate Open County dispute with Fonterra

1.00pm

The Commerce Commission said today it would investigate Open Country Cheese's dispute with Fonterra.

Open Country last month applied for a determination on the delivery cost of raw milk Fonterra is legally required to provide it with.

Under the Dairy Industry Restructuring Act, Fonterra is obliged to sell up to 50 million litres of milk to any one competitor each season.

Open Country has applied to purchase 50 million litres of raw milk from Fonterra for use in the production of high quality cheese. But the companies have been unable to agree on transport charges.

While Fonterra contends the national average transport cost is the reasonable amount to charge, Open Country argues that the costs should take into account factors such as the location of its plant in an intensively farmed area, the volumes purchased and the reasonable collection catchment for the milk.

The Commerce Commission said it would complete its determination as soon as possible.

- NZPA