This paper discusses the axisymmetric squeeze flow of concentrated transversely isotropic fibre suspensions in a power-law matrix and relates to the processing of composite materials such as sheet moulding compounds (SMCs) and glass mat thermoplastics (GMTs). A solution to the squeeze flow problem for a transversely isotropic power-law fluid is presented first, followed by a more detailed micromechanical analysis. In the first part of the paper a variational approach is applied to the interpretation of squeeze flow behaviour. This gives a simple expression for the total pressure, which enables the contributions due to extension and shear to be separated. Applying the procedure to GMT data suggests that the dissipation is predominantly extensional, except at very low plate separations. In the second part, a non-local constitutive equation is derived based on a simple drag law for hydrodynamic interactions. This is then used to model the pressure distribution when the effective length of the fibres is comparable to or determined by the dimensions of the squeeze flow plates. The model is shown to describe the observed squeeze flow stresses in both long and short fibre systems and to relate behaviour to the underlying resin flow properties.