28 Aug 2012

Milk price reassurance hailed by Fonterra

6:29 am on 28 August 2012

Fonterra says the Commerce Commission's dry run on how it sets its farm gate milk price should reassure its farmer shareholders and potential outside investors.

Under the amended Dairy Industry Restructuring Act, the commission has the role of monitoring and reporting on Fonterra's price setting.

Primary Industries Minister David Carter asked it to do a dry run to show how the monitoring arrangement would work in practice.

And the test run indicated that Fonterra's milk pricing is consistent with the aim and principles of the legislation.

Fonterra says the review backs up the integrity of its milk price as it prepares for Trading Among Farmers.

corporate finance head Alex Duncan said the Commerce Commission will look at at Fonterra's milk price manual next. It will also monitor and report on the current season's milk price.