New Zealand dairy giant Fonterra is supplying close to 400 million litres of raw milk a year to independent NZ processors at a default milk price-the maximum it is required to by law. The milk was being sold to New Zealand Dairy Foods, Auckland processor Independent Milk Producers, several other small companies and from next month, a new Waikato venture, the Open Country Cheese Company, said Fonterra chairman Henry van der Heyden. Fonterra, an effective monopoly controlling more than 95% of New Zealand's raw milk supply, is required under the Dairy Industry Restructuring Act 2001 to make up to 400 million litres of raw milk available annually to other processors. Open Country will initially buy 50 million liters a year from the big co-operative.

Open Country, a cheese export venture headed by former National deputy prime minister Wyatt Creech, last month asked the NZ Commerce Commission to intervene in its dispute with Fonterra over "reasonable" milk transport costs.

Fonterra has named Australian Ian Johnson as an independent director. The co-operative has also developed a low-carbohydrate yogurt that cashes in on the latest U.S diet trends.

The yogurt, which has 70% less carbohydrate than standard yogurt, was developed by Fonterra specialty ingredients businesses Fresh Dairy Solutions and DairiConcepts, a Fonterra joint venture with Dairy Farmers of America.

Researchers in the United States estimate that more than 17% of households are following a low-carb regime such as the Atkins or the South Beach diet.

Citing high production costs, small volumes and market trends, dairy goods manufacturer Parmalat Australia says it is closing its soft cheese and butter factory at Warwick in southeast Queensland. Managing director David Lord said Parmalat was "very disappointed" for the 44 employees who would lose their jobs and insisted the company had no plans for any further rationalization of its Australian assets. Lord said the Australian subsidiary of the embattled Italian company Parmalet Finanziaria which collapsed last year with massive debts, would mothball rather than sell the factory.