Global Dairy Co. - the new NZ dairy giant to be formed by the merger of Kiwi Dairies and the New Zealand Dairy Group, is the subject of heated calls for competition scrutiny. Industry groupings have supported claims by Professor Neil Quinn of Victoria University that the new entity does not represent the best deal for New Zealand and should not escape Commerce Commission scrutiny.

Sources at the proposed Global Dairy Co. believe it is exempt from the Commerce Act because most dairy production is exported. They claim it will allow the emergence of real competition in the sector. Yet Quigley and other industry groups such as Business Roundtable, stress that the mega-merger should be exposed to the full scrutiny of the Commerce Commission.

Roger Kerr, executive director of Business Roundtable, said that some features of the proposal, such as the absence of price unbundling and the basis on which the domestic milk company Dairy Foods would be set up, could be to the detriment of competition.