By LIAM DANN
New dairy export company Open Country Cheese has taken Fonterra to the Commerce Commission over the price it charges to deliver milk.
Open Country - founded by former National MP Wyatt Creech - is the first new local competitor Fonterra has faced since it was formed in 2001.
Because of
its dominant industry position Fonterra is required by law to sell milk to competitors at a default price which can be contested through the commission.
Open Country's application to the commission says the two parties have been unable to agree on the value of the transport component of the default milk price for raw milk.
Based at Waharoa in the Waikato, Open Country has a factory which will begin production next month.
It plans to make and export up to 20,000 tonnes cheese a year.
Creech said yesterday that the relationship with Fonterra remained amicable but that it was important to test the new law.
He would not comment on details of the case other than to say it related to transport costs charged by Fonterra.
As the first dairy company of any scale to deal with Fonterra on this issue it made sense to find out what the law meant, he said.
The commission has asked Fonterra to comment on Open Country's application no later than 10 working days after receiving notification.
Fonterra declined to comment on the issue.
After receiving Fonterra's input, the commission will decide whether to proceed with an investigation.
Last year, the commission ruled that Fonterra breached the Dairy Restructuring Act by failing to supply a small Auckland milk processor - Independent Dairy Producers - with raw milk at the default price as required by the law.
In that case, Fonterra was ordered to pay compensation of $60,000.
