14 Mar 2011

Milk market 'competitive' despite price rises

11:43 am on 14 March 2011

Agriculture Minister David Carter says the laws governing the domestic fresh milk market are working despite public concerns over rising milk prices.

Mr Carter called for the report into the cost of milk after receiving complaints that it is now dearer than soft drinks.

He says the report has found the Dairy Industry Restructuring Act, designed to promote competition in the marketplace, is working as intended.

The retail price of milk rose by 13 cents to $1.82 a litre between June 2010 and January 2011, due to high international dairy prices.

Dairy company Fonterra, which dominates the industry, and the country's two biggest supermarket chains have already responded to the complaints by putting a freeze on milk prices until the end of the year.

Mr Carter says the report has found that restructuring a decade ago has created a competitive local milk market.

He says the Government will not be intervening to reduce milk prices because it would go against trading principles.