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Fonterra's potential asset sale sparks concerns among farmers

New Zealand 17.05.2024
Source: The DairyNews
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Farmers are expressing apprehension over the possibility of dairy giant Fonterra selling its Australian assets, fearing it could lead to further downward pressure on milk prices.
Fonterra's potential asset sale sparks concerns among farmers

Fonterra, known for brands like Western Star butter and Perfect Italiano cheese, operates several manufacturing sites in Victoria and Tasmania, employing approximately 1600 individuals.

CEO Miles Hurrell has hinted at a significant change, including the potential sale of its Australian assets. "We are exploring divestment options for our global consumer business, as well as our integrated businesses Fonterra Oceania and Fonterra Sri Lanka," he announced.

The company has already received unsolicited offers for parts of its business, prompting consideration of ownership restructuring. However, farmers like Gippsland producer Aaron Thomas are wary, expressing concern about the uncertainty such announcements create.

Dairy Farmers Victoria president Mark Billing echoes these sentiments, emphasizing the importance of maintaining competition in the market, especially amidst a backdrop of industry consolidation.

While Fonterra's decision to explore divestment represents a departure from its previous stance, stakeholders, including consumers, are closely watching the developments. The potential sale could impact not only farmers but also consumers, potentially altering the competitive landscape of the dairy industry.

As discussions progress, regulatory approval will be crucial in ensuring that any deal struck does not stifle competition or adversely affect stakeholders.

We previously wrote:

Bega Group and Perich Group are being considered as candidates to purchase Fonterra's B2C dairy business

Fonterra, the Largest Dairy Cooperative, May Sell Its Consumer Goods Division