Fonterra is largely meeting its statutory requirements for its 2012-13 base milk price calculation, the Commerce Commission says.
This is the price Fonterra pays dairy farmers for their raw milk.
The review saw the commission consider the extent to which assumptions, inputs and process that are used to calculate the base price provide an incentive to Fonterra to operate efficiently while providing for contestability in the market for the purchase of milk from farmers, commission deputy chairwoman Sue Begg said.
«The commission’s view is that these statutory tests are largely met,» she said.
The review is the second of two annual reviews that the Dairy Industry Restructuring Act 2001 (DIRA) requires the commission to undertake.
The commission completed the first review in December 2012 on Fonterra’s milk price manual.
The base milk price review focuses on the commission’s assessment of the extent to which Fonterra’s 2012-13 base milk price calculation is consistent with the purpose of the milk price monitoring regime set out in the DIRA.
The commission will publish the final report by September 16.
Source: Stuff
