2006 Open Country Cheese Company Determination

Final Determination

(2 documents)

Open Country Cheese Company and Fonterra Co-Operative Group - Executive Summary PDF (37 KB)
Decision 570 - Application for Determination under DIR Act - Open Country Cheese Company and Fonterra Co-Operative Group - 23 December 2005 PDF (562 KB)

Conference

(25 documents)

Fonterra - Open Country Cheese - Raw Milk Transport Costs - Response to Commission's 16 September 2005 Letter PDF (90 KB): The Commission has written to you asking whether the word "farm" in the following sentence from page 5 of our 2 September 2005 report is a typographical error:

This argument does not require that the law of one price apply: it simply requires that independent processors have to pay at least what Fonterra pays at the farm gate.

The Commission has asked whether we intended to use the phrase "factory gate" rather than "farm gate".
Commerce Commission - Letter to Minter Ellison Rudd Watts - Open Country Cheese Dairy Determination - clarification of potential typographic error PDF (190 KB): Clarification of potential typographic errors made in OCC dairy determination.
Cross submission from D.Bay, J.Hedley, J.Washer, B.Earnshaw, M.Cooper, E.James - 02_09_05 (2).TIF (220 KB)
Cross submisison from J Hedley (2).TIF (256 KB)
Cross submission from David Bay - 31_08_05 (2).TIF (16 KB)
Cross submisison from B Earnshaw (2).TIF (57 KB)
Memorandum from Counsel for Open Country Cheese Co Ltd in Relation to Use of Cabinet Papers when Considering the Interpretation of the Dairy Industry Restructuring Act 2001 PDF (2.7 MB): When making submissions to the Commission on behalf of Open Country on 17 August 2005, counsel was asked for authority to support counsel's invitation to the Commission to consider certain extrinsic aids to interpretation.
Open Country Cheese Cross Submission on the Transport Charge for Default Milk Delivery PDF (2.2 MB): Open Country have offered to meet a transport charge that covers all the costs of transport Fonterra incurs in supplying milk to Open Country, Fonterra have demanded more - they seek a charge that recovers more from Open Country then the transport actually costs and thereby contribute towards Fonterra's nationwide transport costs, including costs from which it acknowledges Open Country can receive no benefit.
Charles River Associates - Raw Milk Transport Cost Responses - Final Report, 2 September 2005 PDF (409 KB): On 3 September 2004 Open Country Cheese Company Limited made an application pursuant to s.120 of the Dairy Industry Restructuring Act 2001 seeking determination for a dispute with Fonterra. Open Country has seen and carefully examined the submissions as posted on the Commerce Commission website. Following that review, Open Country wishes to make a further submission covering points raised in the Fonterra submission.
Fonterra - A New Regime for Winter Milk, 02 Spetember 2005 PDF (528 KB)
Fonterra - Further Submissions regarding Open Country Cheese Application for Dispute Determination PDF (1.1 MB): These submissions deal with points raised in the conference before the Commerce Commission on 16, 17 and 18 August 2005, and specific questions in the letter from the Commerce Commission dated 19 August 2005.
Additional Letter to Minter Ellison Rudd Watts regarding Conference Followup Questions, 29 August 2005 PDF (69 KB)
Commerce Commission - Letter to Minter Ellison Rudd Watts regarding conference followup questions PDF (1.2 MB): As indicated at the conclusion of the conference, the Commission has a number of further questions for Fonterra following on from the conference. The Commission is also requesting some updated information that was no available at the time of the draft determination.
Commerce Commission - Letter to Open Country regarding Conference Followup Questions PDF (362 KB)
Jones - Submission regarding Open Country Cheese Transport Determination, 30 May 2005 PDF (117 KB)
Open Country Cheese Dairy Draft Determination - Conference Timetable PDF (79 KB)
Dairy Determination Conference Transcript, 16 August 2005 PDF (416 KB)
Dairy Determination Conference Transcript, 17 August 2005 PDF (263 KB)
Dairy Determination Conference Transcript, 18 August 2005 PDF (255 KB)
Fonterra's Reply to Open Country Cheese Submissions Regarding Dispute Determination PDF (615 KB): Fonterra's Reply to Specific Points in OCC Submissions of 7 June 2005
CRA - Presentation to the NZ Commerce Commission: Milk Transport Costs PDF (1.9 MB)
Open Country Cheese - Response to Fonterra Covering Letter, 10 June 2005 PDF (445 KB): The letter from David Mathews (General Counsel - Fonterra) touches on most of the issues raised in the various submissions in support of Fonterra.
Open Country Cheese - Response to CRA Submission, 17 August 2005 (tabled at conference) PDF (924 KB): Using the approach of presenting the Fonterra position as the 'null hypothesis' and the alternative position advanced in the Draft Determination as the 'counter-factual', the CRA international paper offers arguments based on its view on the broad intent of the DIRA and economic efficient arguments. Neither is valid.
Open Country Cheese - Submission to conference, 17 August 2005 PDF (707 KB): Open Country submits that the Commission is correct in both its approach to statutory interpretation as a matter of law, and in its application of that approach to regulation 8(5) of the Dairy Industry Restructuring (Raw Milk) Regulations 2001 (the regulations).
Jim Hedley - Submission regarding Open Country Cheese Transport Determination, 18 August 2005 PDF (176 KB)

Submissions on Draft Determination - Main Parties

(5 documents)

Fonterra - Cover Letter - Draft Determination - Open Country Cheese - Transport Costs PDF (1.3 MB): This letter and the accompanying documents prepared by our legal advisors, James Farmer QC and Minter Ellison Rudd Watts, by CRA International (CRA) and by Fonterra's Shareholders Council are Fonterra's response to the Commission's Draft Determination of 29 April 2005.
Fonterra Co-operative Group - Submission in Response to Commerce Commission Draft Determination on Open Country Cheese Company Ltd, 10 June 2005 PDF (1.4 MB): Following an application by Open Country Cheese Company Limited for a determination under section 120 of the Dairy Industry Restructuring Act, the Commerce Commission has issued a Draft Determination setting out its preliminary views and seeking further submissions. This submission and the accompanying report from CRA International provide Fonterra's response.
CRA International Report - Review of the Draft Determination on Raw Milk Transport Costs PDF (265 KB): The Dairy Industry Restructuring Act (the "DIRA") was established with the express purpose of allowing the formation of a nationwide cooperative with very large market share in the New Zealand raw milk and processed milk markets. At the time (as now) the optimal structure of the dairy markets in New Zealand was a matter of debate. The DIRA with its strictures on the cooperative (now termed Fonterra) sought a structure that, in accord with modern corporate governance principles, enabled the optimal industry and
organisational structures to evolve over time in response to forces of competition in the
product, ownership, capital and labour markets.
Fonterra Shareholders Council - Submission regarding Open Country Cheese Transport Determination PDF (1.9 MB): The shareholders acknowledge the need for competition by independent processors for milk supply, but the competition must be fair and equal to all parties. It was never the intention of the DIRA that Fonterra and its shareholders would subsidise other competitors.
Open Country Cheese - Submission regarding Open Country Cheese Transport Determination, 08 June 2005 PDF (2.2 MB)

Confidentiality Procedures

(4 documents)

Commerce Commission - Guide to Confidentiality Order - Determination of a Dispute Between Open Country Cheese and Fonterra PDF (136 KB): The Commerce Commission (Commission) is determining a dispute between Open Country Cheese Company Limited (Open Country) and Fonterra Co-operative Group Limited (Fonterra) as to the amount Open Country should pay Fonterra for the costs of transporting raw milk (the Determination). The Commission made an order under section 100 of the Commerce Act 1986 (Order) in relation to the Determination to prohibit the disclosure of any information provided to the Commission during the course of the Determination and identified by any party or the Commission as being confidential. The Order specifies what use may be made of the information it covers.
Commerce Commission - Application by Open Country Cheese for the Determination of a Dispute with Fonterra - Section 100 of the Commerce Act 1986 Confidentiality Order PDF (177 KB): The Commission makes this order (Order) under section 145 of the Dairy Industry Restructuring Act 2001 and section 100 of the Commerce Act 1986 (the Act) in relation to the Determination, the interested parties to which are the persons listed in Schedule 3 and such other interested persons as designated by the Commission (collectively known as the "Parties"), to prohibit the disclosure of any Information provided to the Commission during the course of the proceeding and identified by any party or the Commission as being confidential.
Commerce Commission - Open Country Cheese Application for Determination - Schedule of Nominated Counsel PDF (89 KB): The following table lists the people that have been appointed (to date) as nominated counsel for the various interested parties to the Determination. This table will be updated as new information is received.
Commerce Commission - Open Country Cheese - Application for Determination - Schedule of Confidential Information PDF (92 KB): The following table lists documents or groups of documents held by the Commerce Commission in relation to the Open Country Cheese Determination that contain Restricted Information. Wherever possible, the Commerce Commission has made public versions of the documents or information available as part of the Determination Draft Report or as public documents on the Commerce Commission's website.

Draft Determination

(2 documents)

Commerce Commission - Open Country Cheese Draft Determination - Public Version PDF (2.2 MB): The Commission's preliminary view is that the reasonable transport costs to Open Country Cheese Company Limited should reflect the cost of transporting the raw milk to Open Country Cheese Company Limited. The Commission considers that it is appropriate to use costs that a Fonterra stand-alone Waikato region raw milk transport division would bear, and scale them to reflect the cost of transport to Open Country Cheese Company Limited. The application of the Commission's proposed method results in a transport charge to Open Country Cheese Company Limited of 14.76 cents per kilogram of milk solids for the 2004-05 season. If the Commission's preliminary view is confirmed in the final determination, Fonterra Co-operative Group Limited will have been found to have been in breach of the Dairy Industry Restructuring (Raw Milk) Regulations 2001.
Commerce Commission - Open Country Cheese Draft Determination - Executive Summary PDF (183 KB): The Commission's preliminary view is that the reasonable transport costs to Open Country Cheese Company Limited should reflect the cost of transporting the raw milk to Open Country Cheese Company Limited. The Commission considers that it is appropriate to use costs that a Fonterra stand-alone Waikato region raw milk transport division would bear, and scale them to reflect the cost of transport to Open Country Cheese Company Limited. The application of the Commission's proposed method results in a transport charge to Open Country Cheese Company Limited of 14.76 cents per kilogram of milk solids for the 2004-05 season. If the Commission's preliminary view is confirmed in the final determination, Fonterra Co-operative Group Limited will have been found to have been in breach of the Dairy Industry Restructuring (Raw Milk) Regulations 2001.

Submissions on Application

(14 documents)

Fonterra Co-operative Company Ltd - Submission on Application by Open Country Cheese under section 120 of the Dairy Industry Restructuring Act - Public Version, 6 December 2004 PDF (2.1 MB): Open Country Cheese Company Limited ("OCC") has made an application under section 120 of the Dairy Industry Restructuring Act 2001 ("the Act") for a determination by the Commerce Commission. OCC seeks a determination of the dispute that OCC has with Fonterra Co-operative Group Limited ("Fonterra") over "the reasonable cost of transporting raw milk" to OCC under regulation 8(5) of the Dairy Industry Restructuring (Raw Milk) Regulations 2001 ("the Regulations").
Fonterra Submission - Attachment 1: Scheduling Areas, 6 December 2004 PDF (328 KB)
Fonterra Submission - Attachment 2: Map, 6 December 2004 PDF (919 KB)
Final Report from Charles River Associates supporting Fonterra submission - Public Version, 7 December 2004 PDF (147 KB): On 3 September 2004 Open Country Cheese Company Limited made an application pursuant to s.120 of the Dairy Industry Restructuring Act 2001 seeking determination for a dispute with Fonterra. Open Country has seen and carefully examined the submissions as posted on the Commerce Commission website. Following that review, Open Country wishes to make a further submission covering points raised in the Fonterra submission.
Open Country Cheese Company Ltd - Submission on Dairy Industry Restructuring Act: Application for Determination by Open Country Cheese, 5 November 2004 PDF (2 MB): We have considered the position following the discussions and decided it could be helpful if we put in writing a broad summary of the key submissions we made to the officials.
Open Country Cheese - Reponse to Fonterra Submission, 8 January 2005 PDF (2.1 MB): On 3 September 2004 Open Country Cheese Company Limited made an application pursuant to s.120 of the Dairy Industry Restructuring Act 2001 seeking determination for a dispute with Fonterra. Open Country has seen and carefully examined the submissions as posted on the Commerce Commission website. Following that review, Open Country wishes to make a further submission covering points raised in the Fonterra submission.
Fonterra - Submissions in Reply to Submissions of Open Country Cheese Regarding Open Country Cheese Application for Dispute Determination PDF (163 KB): Fonterra makes the following submissions in reply to the submissions of Open Country Cheese Company Limited ("OCC") dated 8 January 2005 ("OCC submissions").
Charles River Associates - Fonterra Response to Further OCC Submission, 16 February 2005 PDF (124 KB): Open Country Cheese Company Limited ("OCC") filed a further submission with the Commerce Commission on 8 January 2005 in relation to its transport costs regulatory application. That submission includes some discussion of our 7 December 2004 report. The purpose of this memo is to briefly respond to that discussion.
Peter Murdoch - Submission on Dairy Determination, 22 October 2004 PDF (154 KB): Submission on dairy determination by Peter Murdoch
Federated Farmers of New Zealand (Inc) - Submission on the Application for s 120 Determination (Transport Component of Default raw Milk Price), 27 October 2004 PDF (118 KB): Federated Farmers of New Zealand (Inc) appreciates the opportunity to comment on Open Country Cheese Company Limited's application to the Commerce Commission for a s 120 determination (transport component of default raw milk price).
Rod Thomson - Submission on Dairy Determination, 28 October 2004 PDF (60 KB): Submission on dairy determination by Rod Thomson.
Elstow and Te Aroha District Federated Farmers - Submission regarding Supply of Milk to Open Country Cheese, 29 October 2004 PDF (61 KB): Elstow and Te Aroha District Federated Farmers support Fonterra regarding Open Country Cheese and Fonterra dairy dispute determination.
Auckland Dairy Farmers of New Zealand - Submission on Open Country Cheese Ltd - Application for s 120 Determination (Transport Component of Default Raw Milk Price), 29 October 2004 PDF (60 KB): We strongly support Fonterra's position defending the transport charges it makes to all independent processors including the Open Country Cheese Company Ltd which has applied for a determination under the Dairy Industry Restructuring Act 2001 relating to charges for reasonable transport costs with Fonterra Co-operative Group.
Serra Natural Foods Ltd - Submission regarding Open Country Cheese Company Dairy Determination, 16 November 2004 PDF (218 KB): Regarding the reasonable cost of transporting the raw milk to the independent process I believe the current method Fonterra uses of charging their average transport cost is efficient, equitable, economic, transparent and easily ascertainable.

Application for Determination

(2 documents)

Open Country Cheese - Application for Determination, 3 September 2004 PDF (2 MB): The parties involved in this dispute are Fonterra and Open Country Cheese Company Limited (Open Country).

Open Country was incorporated on 30 November 2001 with the objective of profitably manufacturing and selling superior international quality cheese into the market from new Zealand sourced high quality milk commissioning scheduled to commence on 21 September 2004 and full operations scheduled to begin on 1 October 2004.
Commerce Commission - Decision No 534: Decision Whether to Determine the Application for Determination from Open Country Cheese Company Limited PDF (417 KB): Open Country Cheese Company Limited has applied for a determination under section 120 of the DIR Act, realtig to a dispute with Fonterra Co-operative Group Limited about the 'reasonable cost of transporting the raw milk to the independent processor' that is used in the calculation of the default milk price in regulation 8(5) of the Dairy Industry Restructuring (Raw Milk) Regulations 2001.

2006 Open Country Cheese Company Determination

Documents

Final Determination

Conference

Submissions on Draft Determination - Main Parties

Submissions on Draft Determination - Independent Processors

Submissions on Draft Determination - Industry Groups

Submissions on Draft Determination - Individuals

Confidentiality Procedures

Draft Determination

Submissions on Application

Application for Determination

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