By PHILIPPA STEVENSON
The Commerce Commission has cleared the second takeover bid by Fonterra's major domestic market supplier, Mainland, for Invercargill company Southern Fresh Milk.
The commission blocked Dunedin-based Mainland's first move last May, ruling it could create market dominance in the South Island.
Since then Mainland's major local market competitor, New
Zealand Dairy Foods - half owned by Fonterra but to be sold by October - has built a town milk processing plant in Christchurch which could provide competition in the south.
It is expected to produce its first milk next week.
Southern Fresh, which has the So Fresh milk brand in Otago and Southland and supplies supermarket housebrand milk, also sells Dairy Food's Anchor brand under a franchise.
It has turnover of $20 million, including $6 million of mainly ice-cream and white-sauce exports to Japan and Australia.
Dairy Foods chief executive Peter McClure said yesterday the Anchor contract would not be renewed following the Mainland acquisition, and his company was now ready to meet the competition.
Investment vehicle Invest South holds 16 per cent of Southern Fresh and Southern Dairy Investments holds 8 per cent.
The rest is held by 21 supplying farmers.
