Kaimai, Fonterra milk supply dispute goes to regulator

Thursday 31st July 2008

A dispute between Kaimai Cheese Co. and Fonterra Cooperative Group over supplies of raw milk for the cheese-maker will be determined by the Commerce Commission.

"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 2008/2009 season," the commission said in a statement.

Kaimai, whose shares trade on the Unlisted market, started operations in January producing a range of European style cheeses under French cheese-maker Philippe Aucher. It counts former Revenue Minister Wyatt Creech as company secretary and currently buys its milk from Open Country Cheese Co., also traded on Unlisted.

In its application to the commission, Kaimai said Fonterra has refused to supply raw milk arguing the cheese-maker isn't an independent processor under the Dairy Industry Restructuring Act 2001 and the Dairy Industry Restructuring (Raw Milk) Regulations 2001.

Kaimai wants to buy about 10 million litres of raw milk from Fonterra though it wants it delivered to Open Country which has a contract to pasteurize the milk. Fonterra says the 10 million litres would count toward Open Country's 50 million litre allocation under the Raw Milk Regulations.

By Jonathan Underhill

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