31 Mar 2011

Groups welcome chance for milk price inquiry

1:35 pm on 31 March 2011

Interest groups have welcomed the Commerce Commission's decision to consider holding an inquiry into the price of milk after it received several complaints.

The commission says it does not undertake price control investigations lightly and will have to consider the amount of competition in supply, manufacturing and retailing before going ahead.

The Green Party's food spokesperson, Sue Kedgley, is confident the commission will find that dairy cooperative Fonterra has a virtual monopoly and an inquiry is warranted.

However, Fonterra says there is competition and the inquiry is not needed.

Consumer New Zealand's chief executive Sue Chetwin says its recent survey found 79% of those asked thought there should be an inquiry into pricing.

The cost of a litre of regular milk rose by 13 cents to $1.82 between June 2010 and January this year.

Fonterra and the two biggest supermarket chains have frozen prices until the end of this year.

Federated Farmers supports the commission's preliminary analysis as an opportunity to get to the bottom of speculation over milk prices.

Dairy spokesperson Willy Leferink says a comparison with other countries shows that New Zealand retail milk prices are very competitive.