Fonterra dairy farmers say the Commerce Commission’s decision not to hold a milk price inquiry is sound, and that people should stop asking dairy farmers to subsidise the general public. 

The Commerce Commission announced earlier this week that, it wouldn’t hold a milk price control inquiry, telling Country 99TV it simply didn’t have the right legislative tools to investigate the matter.

Because the Commission can only conduct price control inquiries when there is little or no competition in an industry, which isn’t the case with dairy, it is unable to investigate the issue. 

Quite why it took them four whole months to work out there were multiple competing players in the dairy sector, hasn’t been explained, yet.

However, Fonterra’s chief financial officer Jonathan Mason welcomed the decision, saying the company had always been of the view no inquiry is needed, and pointed to a report Fonterra had commissioned recently, which found the sector is thriving.

But the government indicated that its’ multi-department investigation into the price of milk will continue – and many opposition MPs are now calling for a Select Committee inquiry into milk pricing.

A Select Committee inquiry would mean the public would be able to follow proceedings closely.

These calls have not gone down well with farmers, who feel they are again being made a public scapegoat. 

Taupiri dairy farmer Neil Bateup says he is disappointed.

"I think it was a good move, but I’m disappointed the Government now is going to continue with the inquiry, which I don’t think is warranted at all." 

Neil Bateup says Kiwis are paying the world price for milk, and, while he supports Fonterra’s freeze on milk price increases earlier this year, any reduction in the retail price of milk would mean dairy farmers were subsidizing the general public.  

"If there’s any control put on the price of milk in shops it’s basically a subsidy from farmers to the general public. If the Government wants to do something about that then they can fund it. But I don’t believe that farmers should." 

This argument was echoed by Federated Farmers dairy spokesperson, Willy Leferink, who says he keeps being questioned by people about why dairy farmers aren’t doing more to help the squeeze on consumers. 

Mr Leferink says it’s not the role of the dairy sector to be the social welfare department.

"Like yesterday I had a couple of questions coming towards me like 'should be we be looking after the New Zealand public better and all this?' Yeah, that’s a debate for the Government to have. It’s not for us to be social welfare.

"You know we’re happy to play our part, like Fonterra does the milk in schools and that sort of stuff, but we’re not social welfare.

"We’re here to make a buck for New Zealand, and ourselves, and when the dairy industry does well New Zealand does well. Dairy is a big part of the economy."    

But spokesman for the independent processors, Peter Fraser, says the independent processors are happy with the outcome too.

"And what the Commerce Commission said is that ‘look, while we’re not doing anything under part 4, we’ve had a range of concerns raised to us which are effectively concerns under part 2.

"Now part 2 is the abuse of a firm’s market power, and to be honest that’s the argument independent processors have been making since the beginning of the year."

But Mr Fraser says he simply doesn’t understand why it took the Commerce Commission so long to report back that there is competition, nor why the government is now sitting on releasing its report.

"I mean they’re saying it’s pretty hard. But hey, that’s their bloody job. That’s what they get paid for. Of course it’s bloody hard. But get to an answer!

"What have they done since March? Well it looks like they’ve done nothing at all."