Cabinet likely to back milk inquiry - Key

The Government is more likely than not to support an inquiry into the price of milk when the issue goes before Cabinet today, Prime Minister John Key says.

Labour and the Greens have been pushing for a select committee inquiry after the Commerce Commission on Tuesday decided not to stage a formal investigation into the price of milk.

The giant dairy cooperative still faces several other probes, including one into alleged abuse of market powers and an inter-departmental review of its raw milk price.

Mr Key said the Government was "more likely than less likely" to support an inquiry.

"What is quite clear is that people are frustrated with the price of milk given," Mr Key told Newstalk ZB.

"They're not convinced at the moment that they're getting a fair price."

Mr Key said he did not believe Fonterra was ripping off New Zealanders, and that there was evidence of that in work the Government had previously done on the issue.

Agriculture Minister David Carter yesterday said there would be "some value" in holding a select committee inquiry.

"I think a select committee inquiry could actually delve in and, at the end of the day, if they actually demonstrated to New Zealand there's a wide variety of pricing at the retail sector for people to buy milk, that would be quite useful," Mr Carter told TVNZ's Q and A programme.

There was a lot more variation in the retail price of milk than people realised, and that would be important for the select committee to show, he said.

- NZPA