Fonterra chairman John Monaghan (left) and Fonterra chief executive Miles Hurrell. Photo / Jason Oxenham
Fonterra chairman John Monaghan (left) and Fonterra chief executive Miles Hurrell. Photo / Jason Oxenham
Fonterra's leadership say they're very comfortable with where the co-op is at following this week's news Tip Top has been sold to an overseas company.
Chief executive Miles Hurrell told Jamie Mackay on The Country proceedings at Fonterra's My Connect conference took a break yesterday so management could "front up"to farmers' questions over the sale.
Fonterra has sold the ice cream business to Froneri, which was created in 2016 by Nestle and UK ice cream company R&R – owned by French private equity firm PAI Partners.
The purchase price was confirmed as $380 million.
Hurrell told Mackay he was "very happy with the outcome" of the sale.
"We've said right from the outset that we have a dairy nutrition strategy for our co-op. This is a confectionery business, it is off-strategy from where we've been".
Listen to the full interview below:
Fonterra chairman John Monaghan agreed, although he admitted the Tip Top sale was a "bittersweet" moment for part of the co-op's shareholder-base, who were "very emotionally attached" to the brand.
Despite the sadness around the sale, Monaghan told Mackay the fact Tip Top was sold at a very good "multiple" had "certainly ... eased some of that pain" for farmers.
Shareholders could also console themselves with the fact that Fonterra would continue to supply milk to Tip Top, and although Kapiti ice cream would be licenced to Froneri, Kapiti cheese would stay with the co-op.
It was most important that the manufacturing assets remained in New Zealand, Hurrell said.
"To see a trade buyer such as Froneri come out and be prepared to do that ... leaves us in a good position. So we're very comfortable with that".
Perhaps most importantly nobody had lost their job at Tip Top, Hurrell said.
Also in today's interview: Monaghan and Hurrell give an update on the My Connect conference, including some of the "forthright" questions from farmers.
