What does Brexit mean for Fonterra?

Stu Gray thinks things may be looking up for dairy but it will take time. Photo / Brett Phibbs

What effect will Brexit have on Fonterra now that the decision has been made?

Fonterra's Head of Co-Operative affairs for Canterbury, Stu Gray catches up with The Country Early Edition's Dom George to find out.

Fonterra have been looking hard at Brexit to see what it could mean for the dairy giant. Short term not much as the incredibly complex deal will take at least a couple of years to sort out.

Gray says only 0.26% of NZ dairy exports go to the UK, less than 3% go to the EU as a whole so it's a small import/export market.

Europe's not that important to us as an export market; in fact for Fonterra we actually bring more product out of Europe these days than we put into Europe.

Fonterra's Stu Gray

In the 1970s when the UK went into the EU New Zealand was largely reliant on butter and cheese exports to the UK.

The move really forced the New Zealand dairy industry to "pack their suitcases", get on the road and find new markets and they were very successful in that venture.

What's happening with the global supply and demand situation at the moment?

Gray says China and Latin America are buying dairy so there is a demand but overall it's still a slow recovery for dairy.

Gray also gives us an insight into all the European investments that Fonterra have tucked away for a rainy day.

Hear the full interview with Fonterra's Stu Gray in the Soundcloud embed below: