The results of the analysis have shown that a long-run single cointegration relationship exists between wholesalers’ and producers’ prices; that the direction of price transmission tends to go from producers to wholesalers; that a change in producer’s prices do not have a significant effect on wholesaler’s prices in the next period; that the speed at which prices tend to converge to fully correct for deviation is moderately slow; and that when producers’ prices decrease the speed of adjustment tend to be significantly faster; in other words, that price transmission is asymmetric. In this regard, policy makers trying to design mechanisms other than traditional technology transfer approaches to increase small dairy producers’ competitiveness should pay close attention to measures aimed at increasing the level of price transmission from wholesalers to producers in the marketing chain.