The Commerce Commission says the domestic dairy industry isn't competitive enough for deregulation yet. With special audio feature.
The report on dairy sector competition reaffirms an earlier view that a staged approach to amending the Dairy Industry Restructuring Act is warranted.
Fonterra collects 85% of New Zealand's milk each year.
The regulator wants the bar for allowing deregulation of the dairy industry raised from the level set in the legislation which established Fonterra in 2001.
The Commerce Commission has confirmed it is reducing the allowable rate of return on capital for regulated electricity and gas network monopolies.