New Zealand’s Commerce Commission has said in a preliminary ruling that New Zealand dairy giant Fonterra must sell raw milk to dairy processor Independent Dairy Producers (IDP) at a “default price”.

IDP had called for the ruling because it felt it was being overcharged by the dairy giant.

The commission said that under dairy legislation, unless there is already a price agreement between the parties for the supply of raw milk, an independent milk processor may require Fonterra to supply that raw milk at the default price.

The draft ruling also said that from 14 December 2001 to 19 March 2002, Fonterra should have supplied IDP with milk at the default, or normal wholesale, price.

In September, Fonterra, which controls around 95% of New Zealand’s milk production, disputed the claims that it was overcharging IDP and said the prices were within the normal market range, reported Dow Jones International News.