16 Sep 2013

Fonterra milk price review result

12:47 pm on 16 September 2013

The Commerce Commission has given Fonterra a qualified pass in its latest milk price review.

Under dairy industry legislation passed last year, the commission has to review Fonterra's farm gate milk price and how it calculates it, twice each season.

The aim is to allow Fonterra to operate efficiently but also provide for competition in buying milk from farmers.

In its latest review, the commission has concluded that Fonterra has largely met the statutory tests in setting the base milk price.

The commission qualified that by saying it's been unable to reach a conclusion on some aspects of the review because of a lack of information.

It has also questioned assumptions about energy use rates, because it relies on data collected during peak processing times and does not take account of seasonal variations.

But the commission says it does not think those will have had a significant impact on the overall finding.

It's now working on a review of Fonterra's milk price manual, which it also has to do each year.