‘Giving it away’: Winston Peters lays into Fonterra over sale of iconic brands

The $3.8b deal with France's Lactalis could rise to $4.2b with Australian assets. Photo / Mark Mitchell

By Giles Dexter of RNZ

New Zealand First leader Winston Peters is demanding answers from Fonterra over the sale of its consumer businesses to French dairy giant Lactalis.

Fonterra has agreed to sell major brands including Mainland and Anchor for $3.8 billion. The potential inclusion of Bega licences held by Fonterra’s Australian businesses could take the headline value of the transaction to $4.2b.

The sale includes a long-term agreement for Fonterra to sell milk and ingredients to Lactalis.

The deal is expected to settle in the first half of next year, subject to regulatory and shareholder approval.

Voting has opened for shareholders, with a virtual special meeting set down for October 30.

Peters said farmers needed to think “very carefully” about the deal and questioned how long the long-term agreement would be.

“Whatever the number, the clock will stop and New Zealand’s milk will become just another in a long line of milk jugs. What stops Lactalis from diluting ‘New Zealand’ products with vegetable fat and lower-quality milk?” he asked.

He also questioned whether Fonterra executives would be getting bonuses for the deal and if they planned on leaving the company after the deal was done.

Peters said Anchor was a flagship and quality brand, with growth ahead of it, and $4 billion was “giving it away”.

“No successful milk futures market exists globally – so why does Fonterra think it will succeed where others have failed? Other dairy giants, like the company they seek to sell to, thrive because of their consumer brands.”

RNZ has approached Fonterra for comment.

Criticising Fonterra for selling its brands is not new ground for Peters. In 2019, he expressed disappointment over the sale of Tip Top.

– RNZ