Fonterra Defends $4.2 Billion Sale to Lactalis Amid Criticism

Fonterra has responded to criticism from New Zealand First leader Winston Peters regarding its planned sale of the Mainland consumer business to France’s Lactalis for $4.2 billion. Peters raised concerns about the future relationship between Fonterra and Lactalis, questioning how long Fonterra would continue to supply milk to the French dairy giant after the transaction.

Peters specifically inquired whether Fonterra’s chief executive, Miles Hurrell, and other executives would receive a success fee if the sale is finalized. He expressed skepticism about the duration of Fonterra’s “long-term agreement” with Lactalis, suggesting that it could be limited to just a few years. “Whatever the number, the clock will stop and New Zealand’s milk will become just another in a long line of milk jugs,” Peters stated.

He voiced additional worries about the potential dilution of New Zealand milk products, questioning what would prevent Lactalis from altering the quality of these products by mixing in vegetable fats or lower-quality milk. Peters emphasized the importance of the Mainland brand, stating that Fonterra was “giving away” a legacy brand with a direct connection to its customers.

“The Anchor brand is a flagship with a legacy built by generations since 1886, marketing New Zealand milk to the world and developing products that foster customer and consumer trust,” he added.

In its defense, Fonterra highlighted that the decision to proceed with the sale would ultimately lie in the hands of its farmer shareholders, reiterating its commitment to ensuring the best outcomes for its members. The cooperative maintains that the sale to Lactalis could provide significant financial benefits, enabling it to invest in its core operations and support its farmers.

The planned transaction has sparked a broader discussion about the future of New Zealand’s dairy industry and the potential implications for local farmers, consumers, and the international market. As the situation develops, stakeholders are closely monitoring the responses from both Fonterra and its critics.

This sale marks a significant moment for Fonterra and may redefine its role in the global dairy sector, particularly concerning product quality and brand integrity. The cooperative’s management is expected to address these concerns in more detail as the sale progresses.