Fonterra's 'asset beta' may be too low, propping up farmgate milk price, ComCom report finds

Tue, 10 Apr 2018

By Jonathan Underhill April 11 (BusinessDesk) - Advisory firms that looked into the 'asset beta' Fonterra Cooperative Group uses to determine the farmgate milk price say it may be too low, meaning its farmer-shareholders are receiving a bigger payout than warranted under the company's enabling law. The Commerce Commission hired Cambridge Economic Policy Associates (CEPA) and Freshagenda to establish whether Fonterra’s proposed approach to estimating the asset beta for a "notional processor" - as set out in the Dairy Industry Restructuring...

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