A parliamentary inquiry into the price of milk will be wide ranging, with MPs agreeing to look at the how the market operates at all levels.
Opposition parties pushed for the inquiry after the Commerce Commission found little or no competition in the supply of milk to processors, but said it did not have the power to intervene at that level.
Prime Minister John Key earlier said he was concerned a select committee inquiry could "cut across" the work of an inter-departmental group looking into raw milk prices and indicated it should be "highly directed at where it makes sense".
However, committee chairwoman Labour's Lianne Dalziel has issued a statement saying the committee had agreed terms of reference for the inquiry.
"The over-arching question for the select committee is whether New Zealanders are paying too much for milk and whether the market is operating at all levels," she said.
The committee would consider pricing from the farm gate to retail and report on any practices that inflated the price or discouraged competition.
It would also consider the impact and influence of retailer and wholesaler practices and the impact of international market prices.
The inquiry would consider whether the regulatory framework in place was adequate to promoted efficient domestic competition and look at possible improvements.
Submissions are open until September 13.
