Scrutiny of how the price of milk is set in New Zealand is cranking up again, with reports that Parliament's commerce select committee will continue an inquiry begun last year.

The select committee has been looking into the price of milk at several levels, from farmgate to the supermarket chiller, but it was not known whether the new select committee would continue it after last year's general election.

The Dairy Workers Union has welcomed the committee's decision to plough on, saying "the real pressure points on milk and dairy product pricing need to be exposed".

National secretary James Ritchie said it was good that attention this week shifted to the supermarket price of milk, because it recognised that the principal drivers of domestic milk prices were beyond the farm gate.

Boutique grocer Nosh this week dropped the price of one litre of Cow and Gate milk brand to $1.

Dairy giant Fonterra, which controls 90 per cent of the raw milk supply in New Zealand, has attributed strong dairy prices at home to buoyant international commodity prices.

- © Fairfax NZ News