Regulator says Fonterra's asset beta for calculating milk price 'not practically feasible'

Wed, 13 Jun 2018

By Jonathan Underhill June 14 (BusinessDesk) - The Commerce Commission says it is concerned that the 'asset beta' Fonterra Cooperative Group uses to determine the farmgate milk price is too low, meaning it ends up paying its farmers a higher price for their milk than would be warranted under the company's enabling law. "The impact of this is that Fonterra calculates a higher milk price than would be the case if it used a more feasible allowance for risk in the cost of finance, consistent with other processors," the commission said in a st...

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