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Unbundling the debate over bundling in the dairy industry

Author

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  • Lewis Evans
  • Graeme Guthrie

Abstract

Building continues to be controversial in the co-operative dairy business. Bundling is the term for lumping together the payment (per kg of milk) to farmers for milk production, with a return from processing. Bundling has a very long history in New Zealand, however, the gradual introduction of fair value share pricing by dairy co-operatives in the 1990's, continued by Fonterra, and combined with Fonterra's valuation process, provides a separation of payments for off-farming processing from those for milk supply that can be expected to significantly improve the economic performance of the dairy industry.

Suggested Citation

  • Lewis Evans & Graeme Guthrie, 2002. "Unbundling the debate over bundling in the dairy industry," Competition & Regulation Times 374303, New Zealand Institute for the Study of Competition and Regulation.
    • Handle: RePEc:vuw:vuwcrt:374303
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    File URL: https://ojs.victoria.ac.nz/crt/article/view/3743
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