Of all the stun grenades Fonterra lobbed into NZ Inc. this week, none rocked the dairy conglomerate's farmer-owners more than the expected $200 million writedown of the New Zealand consumer business.
Flat out with calving and by all accounts battered and bruised by societal, regulatory and banking pressures, shareholders say they have yet to fully absorb the news of Fonterra's likely $590-$675m loss and near-$1 billion asset writedown this year.
But what had sharply registered was the announcement Fonterra's New Zealand consumer business was in intensive care - alongside less surprising cot cases like the Brazil, Venezuela, Australia and China Farms businesses.
"I was shocked," says one shareholder, who like several approached by the Herald, declined to be named.
"The key question shareholders and the Fonterra Shareholders' Council should be asking is what happened to the New Zealand business. That's an absolute major."
A former sector leader, he believes Fonterra's domestic consumer business, with its mainstay brand Anchor, has been "gutted" by Hong Kong-Singapore-owned supermarket rival Goodman Fielder.
He says Fonterra in 2015 allowed its Fonterra Brands NZ boss Tim Deane to be headhunted by Goodman Fielder. "He went with all the trade secrets. They have gutted our business".
Ironically, Fonterra is obliged to supply Goodman Fielder with milk at a regulated price under the Dairy Industry Restructuring Act, which enabled Fonterra's creation in 2001 from an industry mega-merger. The ongoing obligation seeks to curb Fonterra's domestic market power.
Fonterra's explanation for the expected New Zealand business writedown was "the compounding effect of operational challenges, along with a slower than planned recovery in our market share has resulted in us reassessing its future earnings."
The writedown is despite the recent sale of icecream subsidiary Tip Top for $380m, offloaded as part of an ongoing internal business review following Fonterra's historic $196m annual loss last year and concerning debt burden.
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Also troubled by the New Zealand consumer business writedown is Duncan Coull, chairman of the Fonterra Shareholders' Council, the farmer-owner watchdog noted for its silence this week after Fonterra's revelations.
Coull says farmers are surprised and disappointed by the size of the asset writedowns.
But given three of the four businesses written down were under review by Fonterra last year, the announcement about them wasn't a complete surprise, he says.
However, "the magnitude of the change in the New Zealand business sticks out for me".
"When I dig a little deeper and understand 37 per cent of our brand equity is sitting in New Zealand and....yet just 5 per cent of our milk is going into that, the question I ask myself is whether that asset has been overvalued for some time."
New Zealand exports 95 per cent of its total milk production.
Fonterra's New Zealand consumer business is lumped in with Australian market performance under "Oceania" in the cooperative's annual reports.
Last year's annual report on the business was brief but suggested clouds were forming.
Oceania EBIT of $67m was 23 per cent down on the previous year.
The reason given in last year's annual report was: "Lower profitability due to operational challenges in New Zealand - lower margins...higher than expected costs in moving to and starting up a new distribution centre."
However the 2017 annual report for the Oceania consumer business was upbeat - though equally brief. Normalised EBIT was up 4 per cent at $101m.
Shareholders spoken to by the Herald questioned what Fonterra meant this week by rebuilding its "core" New Zealand business. A Fonterra spokesperson responded it was referring to the consumer business, the mainstay of which is the Anchor brand.
Industry observers suggested some ageing and under-used New Zealand factories were conspicuous by their absence from the list of expected asset writedowns.
Fonterra responded: "Our New Zealand ingredient plants are not being written down, except for the usual annual depreciation.
"We are comfortable with our current manufacturing network and have no plans to close any. We look at our manufacturing footprint in New Zealand as a network and we manage plant capacity across our network, striking a good balance between pushing our pace of production during the peak of the milking season and also switching between products quickly to meet changes in demand and prices in global markets," the company said in a statement.