The Dairy Board says it is business as usual at Anchor Foods (UK), one of its largest overseas subsidiaries, despite the latest twist in a long-running dispute between Anchor and British Customs and Excise.
Customs has taken court action to try to block the sale of Anchor's assets to another Dairy
Board subsidiary, New Zealand Milk Products, for about œ9 million ($27.36 million).
The Dairy Board says the sale is designed to protect its UK business from Customs' claim against Anchor for œ270 million of allegedly unpaid import duties on spreadable butter.
The duties dispute has proven time-consuming and distracting for Anchor's management.
The board says the sale is designed "to separate the business of selling butter and cheese from the fight against these various claims."
"We have been forced to pull in our horns and the whole spreadable butter sector has become less profitable."
The board has challenged the duty claims. If they are upheld, Customs could seek payment only from Anchor, not the Dairy Board.
If Anchor's assets are sold, only the proceeds would be available to satisfy the claims.
Customs is contesting, in the High Court, the valuation placed on Anchor, not the Dairy Board's right to sell it.
Mr Justice Neuberger advised the two parties on Friday to try to reach agreement on Anchor's value.
