Dairy Industry Restructuring Act: Commission decides to determine dispute between Kaimai Cheese and Fonterra
31 July 2008
The Commerce Commission has decided to determine a dispute between Kaimai Cheese Company Limited and Fonterra Co-operative Group Limited (Fonterra) about the interpretation and application of regulation 4(1) of the Dairy Industry Restructuring (Raw Milk) Regulations 2001.
The two parties have been unable to agree on terms under which Kaimai is able to access raw milk from Fonterra under the Raw Milk Regulations during the 2008/09 season.
Waharoa-based Kaimai Cheese Company commenced operations on 7 January 2008 and intends to supply a range of soft, hard and semi-hard cheeses.
The Commission's decision (Decision No. 646) to determine the dispute is available in the Dairy Register under Kaimai Cheese Co Determination.
A copy of Kaimai Cheese Company's application to the Commission, and Fonterra's response to the application, are also available on the Commission's website.
The Commission is required to complete a determination as soon as practicable. It is anticipated that an indicative timeframe for completion of this determination will be published shortly, and this will incorporate an opportunity for interested parties to make a submission to the Commission. Any person who is likely to have an interest in the matter may register their interest by emailing firstname.lastname@example.org
Section 120 of the Dairy Industry Restructuring Act 2001 states:
Determination to resolve conflict
1. A person may apply to the Commission for a determination if the person has a dispute with the new co-op (Fonterra) about the application of this subpart (Subpart 5) or regulations made under section 115.
2. Despite subsection (1), the Commission may reject an application, and return it to the applicant (and do no more in relation to the application), if, in the Commission's opinion, -
a. the dispute is not genuine or is vexatious or frivolous; or
b. the applicant does not have a direct financial interest in the matter to which the application relates; or
c. the applicant has not made a reasonable attempt to settle the matter with new co-op; or
d. the Commission has made a determination, or is currently considering an application, on the same matter.
3. The Commission may consider related applications together.
4. An application under subsection (1) must be made within 3 years after the matter giving rise to the dispute arose.
Subpart 5 of the DIR Act relates to the regulation of dairy markets and obligations of Fonterra. The purpose of Subpart 5 is to promote the efficient operation of dairy markets in New Zealand.