PROJECTS
Advice to Open Country Dairy on the Regulated Price of Milk
The problem
Small independent milk processors in New Zealand believed they were disadvantaged by the raw milk price set by Fonterra, the country’s largest raw milk buyer and processor. Independent processors were concerned that Fonterra, which accounts for 85 percent of all raw milk purchases in New Zealand, could influence the price of raw milk by using discretion over how the pricing methodology is applied.
How we helped
Castalia helped Open Country Dairy—an independent milk processor—make submissions to the Commerce Commission during annual reviews of the Milk Price Manual (the price setting methodology) and the calculations applying that methodology. The Commerce Commission has limited oversight powers over the determination of the raw milk price. We reviewed each building block of the pricing methodology and showed where the proposed use of discretion by Fonterra could lead to anti-competitive outcomes.
Impact
Given the limited degree of oversight power available to the Commerce Commission, our analysis was primarily used as ‘moral suasion’ to show the effects of Fonterra’s actions and highlight the potential need for greater regulation.
The client
Our team
How can we help you?
How can we help you?
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
Sinclair House, 3 Glenside Crescent
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (0)1 85 64 10 22
3B Rue Taylor
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-121
Colombia
Thinking for a better world.
WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America
SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia
AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand
WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand
PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France
BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia
Thinking for a better world.