The dairy giant Fonterra says claims being made by Lewis Road Creamery about anti-competitive behaviour are incorrect.
The boutique dairy company is preparing to take legal action against Fonterra.
One of its founders, Peter Cullinane, said it objected to a deal Fonterra is believed to be negotiating with a supermarket chain, which would leave minimal chiller space for other brands.
Lewis Road also intends to challenge a bottle and label design being used by Fonterra's premium Kapiti brand, which Mr Cullinane said was very similar to his company's.
"We think that Fonterra should, at the very least, go back to a design that is distinctive, and a good starting point would be to use their own bottle design, which is the famous light-proof bottle."
Mr Cullinane said the matter could be easily resolved.
But Fonterra New Zealand managing director Leon Clement said Lewis Road's claims were not true.
He said Fonterra had told the smaller company it was wrong, and he was surprised it had decided to take legal action.