The Australian Competition and Consumer Commission has received undertakings from National Foods and its partner Warrnambool Cheese and Butter Factory Company Holdings they will run Dairy Farmers' cheese business as a joint venture and operate their own cheese businesses separately.

National Foods is controlled by Japanese brewing giant Kerin.

The commission is seeking comments on a competing bid for Dairy Farmers by Italian dairy giant Parmalat and the Murray Goulburn Co-operative.

Commission chairman Graeme Samuel said the commission was satisfied the proposed acquisition by National Foods of Diary Farmers would be unlikely to substantially lessen competition.

Dairy Farmers, Australia's biggest dairy cooperative, said a formal sale process was progressing.

Three dairy players have emerged National Foods, Parmalat and the world's largest dairy producer, New Zealand-based Fonterra.

Parmalat and Fonterra are still seeking clearance from the commission.

The price of milk and dairy products has surged in recent years because of growing demand from developing nations.

The commission said it had delayed its final decision until August 21. A decision had been due yesterday. AAP