Dairy company Synlait Milk says dairy farmers are better off because companies like it provide Fonterra with competition, driving up the price farmers are paid for their milk.
Synlait is concerned that Fonterra, which controls 90% of the milk supply, is trying to water down the rules which regulate it and thereby erode domestic competition.
Fonterra recently criticised a Government proposal, part of a review of dairy industry legislation, that it increase the volume of milk it supplies to its domestic competitors.
It says that milk goes directly overseas because those companies are mostly foreign-owned.
Synlait is majority-owned by Chinese company Bright Dairy.
Its chief executive John Penno says all dairy farmers would lose out, Fonterra shareholders included, if that milk supply is taken away from smaller processors.
