Fonterra is ''largely'' meeting its statutory requirements
when it comes to calculating the price it pays dairy farmers
for their raw milk, the Commerce Commission has found.
Following amendments to the Dairy Industry Restructuring Act
in July last year, the commission must undertake two separate
reviews of the dairy co-operative's base milk price setting
in each dairy season.
Those reviews were of its farm gate milk price manual, which
sets out the methodology for calculating the base milk price
for the season, and its base milk price calculation.
The commission released its review of Fonterra's 2012-13 base
milk price calculation this week.
The commission specifically considered the extent to which
the assumptions adopted, inputs and process 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, deputy chairwoman Sue Begg said.
The draft report was being provided to Fonterra for comment,
while feedback from other interested parties was also
welcomed, and the final report would be published by