Federated Farmers has told a Parliamentary inquiry that New Zealanders are not paying too much for milk.
The Commerce Select Committee on Thursday began hearing submissions into milk pricing.
Federated Farmers says it accepts that there has been significant public interest in the price of milk but says New Zealanders are not overpaying.
Its submission compares the cost of a litre of milk in this country with that in six comparable countries.
The data shows that once the Goods and Services Tax (GST) is factored in, New Zealanders pay more than consumers in Australia and the United Kingdom, but less than those in Ireland, the United States, France and Canada.
Federated Farmers argues that while milk prices have risen faster than inflation they have gone up at a slower rate than many other foods.
The Government agreed to an inquiry after the Commerce Commission considered complaints about milk prices but decided it could not launch a full investigation under the terms of the Commerce Act.
The federation argues that the Parliamentary inquiry is unnecessary at this stage because other reviews are already being carried out by the Agriculture and Economic Development Ministeries and the Treasury on Fonterra's farm-gate price of milk and the raw milk regulations.
It says people need to shop around for cheaper milk and encourage supermarkets to drop their prices.
It says countries that have comparably lower prices for milk exempt it from taxes or subsidise the product and some, like Australia, have so-called supermarket wars.
A spokesperson for the federation, David Broome, says the price of milk is a touchstone for consumers' frustration at rising food prices.
Union argues for domestic price
The Dairy Workers Union says New Zealanders should not have to pay a global price for milk.
The union links global factors to the rapid price rise, including what it calls the financialisation of the food industry and the domination of transnational companies in the producing and selling food.
National secretary James Ritchie says the price of milk within New Zealand should reflect taxpayer investment in the dairy industry, which is in the form of infrastructure, biosecurity, trade policy and environmental protection.
He also says while the price of milk is too high, wages and benefits are too low, and policies to lift family incomes also need to be put in place.
