An award-winning cheese producer has closed one of its factories, blaming the rising price of milk and the system for charging for it.
Kaimai Cheese Company has closed its Te Mata factory and cafe in Havelock North.
Executive director Wyatt Creech says the state of the market makes it impossible for a company to be in anything except a very small artisan cheese business.
Mr Creech says the Fonterra dairy co-operative is able to back-charge if milk goes up during a season, which means the company has to sell a product without knowing what the final price of milk will be.
Three production jobs were lost at the factory and the equivalent of six fulltime staff at the cafe, though the company says that may eventually re-open.
The Te Mata factory produced about 140 tonnes of speciality cheese a year including blue, white-rind and feta.
The New Zealand Specialist Cheesemakers Association says milk prices are squeezing the industry and sales are falling as consumers react to high dairy prices.
Board member Di Hawkins says when the milk price is high, cheesemakers have to pay a lot. However, they risk losing sales if they increase prices to cover their overheads.