The Commerce Commission has received an application from Fonterra Co-operative Group Limited seeking clearance to acquire the shares in Kapiti Fine Foods Limited and United Milk Limited from Foodstuffs (Wellington) Co-operative Society Limited.

Fonterra is a vertically integrated dairy products manufacturer and marketer, operating in all dairy products markets in New Zealand and numerous other countries. It operates through two main business divisions: Ingredients and Consumer Dairy Products.

Foodstuffs LNI is a co-operative society specialising in grocery distribution in the lower North Island. Foodstuffs operates a part of its business through its wholly owned subsidiaries Kapiti and United Milk. Kapiti manufactures and processes dairy products, particularly specialty cheeses, premium ice cream and town milk, and operates a raw milk processing facility in Palmerston North, from which it supplies Kapiti's Farmgate and Kapiti branded milk, as well as Pam's and Calci-smart milk for Foodstuffs' lower North Island stores.

In considering the application, the Commission's role is to determine whether the acquisition has the effect of substantially lessening competition in a market.

A public version of the application is available on the Commission's website under Public Registers.