Fonterra enters the battle for cheese Bega Cheese chairman Barry Irvin in Melbourne. IN YET another twist to ­Australia's dramatic cheese wars, New Zealand dairy powerhouse Fonterra has ­finally entered the fray. Fonterra last night launched headlong into the ­industry's buyout saga playing out in the industry, with an aftermarket share raid. But the group is buying up Bega Cheese shares, rather than shares in Warrnambool Cheese and Butter - the ­company at the centre of a heated takeover battle. According to speculation, sweeping the industry, Fonterra had last night reportedly ­secured 5 per cent of Bega stock after hiring Goldman Sachs bankers to do its ­bidding. It was believed to be ­chasing a 10 per cent stake at a price as high as $4.95 a share. Bega shares closed today at $4.41. Fonterra is not planning a buyout of Bega, but wants a major stake in Bega to give it ­negotiating power as the ­industry ­consolidates, ­according to market rumours. It comes on the heels offollows a decision by the Australian Competition and Consumer Commission watchdog to ­allow Bega to pursue its $323 million ­takeover bid for Warrnambool Cheese.The Australian ­Competition and Consumer Commission said that in the dairy region of southwest ­Victoria and areas of the state's north, there was limited overlap between Bega and Warrnambool in the market for acquiring raw milk. Warrnambool has ­received higher bids from Canadian ­giant Saputo and Victorian dairy co-operative Murray Goulburn, while ­Japanese group Kirin bought a 10 per cent stake in the target ­company it this week. ACCC chairman Rod Sims said if Bega bought ­Warrnambool, it would ­"continue to be constrained by other dairy manufacturers, ­including Murray Goulburn and Fonterra." Bega has offered $2 plus 1.2 of its own shares for each Warrnambool share. Murray Goulburn and Fonterra are also the largest suppliers of each of the processed dairy products supplied by Bega and Warrnambool Cheese and Butter, and would be likely to competitively constrain the parties, in the event that they merge, in the future.