The Commerce Commission has made a ruling that forces Fonterra to supply milk to two competitors. Compensation has also been ordered.
The commission says both Kaimai Cheese Company and The Grate Kiwi Cheese Company are entitled to receive Fonterra's milk as independent processors.
It says Fonterra has breached regulations by not supplying Kaimai and Grate Kiwi with milk since October last year and must compensate the two companies.
By law, Fonterra is required to supply up to 50 million litres of raw milk to independent processors.
It argued that they were not eligible since their milk was being initially processed by another company, Open Country Dairy.