Fonterra has received a ruling against the company by the Commerce Commission in its dispute with Kaimai Cheese and The Grate Kiwi Cheese Company. The dispute saw the latter two companies claiming that the former has breached supply rules and must pay eight months in compensation.

It has been learnt that close ties were held by both parties with Open Country Dairy, which was formed out of the merger of Open Country Cheese and Dairy Trust, a direct Fonterra competitor.

This afternoon, the Commerce Commission issued its ruling confirming that Kaimai and Grate Kiwi should become independent processors and separate from Open Country Dairy.

The Commission arrived on the decision that since Fonterra didn't supply Kaimai and Grate Kiwi with independent milk under DIRA since 1 October 2008; it has breached the Dairy Industry Restructuring Act 2001 and now must pay compensation for the loss over that time.

An order to meet and determine compensation amongst themselves was also passed by the Commerce Commission to Fonterra, Kaimai and Grate Kiwi, or else they can apply to the commission to give a ruling to the matter.

(via TopNews New Zealand. Contributed by Kohia Dennison)