15 Mar 2012

Fonterra loses battle with independent cheese companies

2:13 pm on 15 March 2012

Fonterra has lost its legal battle with two independent cheese companies over the raw milk it must supply to competitors.

Last year, the Court of Appeal upheld a High Court ruling that allowed Grate Kiwi Cheese Company and Kaimai Cheese Company independent access to Fonterra's raw milk.

By law, Fonterra has to supply up to 50 million litres of raw milk a year to each independent processor.

Fonterra argued it is not obliged to supply raw milk to the two cheese companies, because it says they're not independent processors.

It says they have similar shareholding and their milk is processed at the same plant.

Both companies use the facilities at Open Country's cheese processing plant in Waharoa in Waikato.

The Supreme Court on Thursday rejected Fonterra's case and ruled that both cheese companies meet regulations under the Dairy Industry Restructuring Act and are entitled to the raw milk.

The Government is reviewing the legislation.