Fonterra and Federated Farmers are questioning a decision to extend the life of regulations that oblige Fonterra to subsidise its commercial rivals.
The Government is effectively prolonging Fonterra's obligation to supply 600 million litres of milk per year to other companies.
The rules were introduced in 2001 to curb Fonterra's market dominance, but have since been used by companies based in Russia and Singapore to acquire cheap milk to sell in markets where Fonterra does business.
Agriculture Minister David Carter says there is still not enough competition in the milk market in New Zealand and so he is extending Fonterra's sales obligation.
However, Mr Carter says the question of who should be eligible to receive Fonterra's milk will be looked at by a review.