Fonterra’s farmer shareholders have voted overwhelmingly in favour of the sale of the brands like Mainland and Anchor to a French company.
More than 88 percent of the votes cast at a special meeting backed the $4.2 billion sale to French dairy giant Lactalis.
ASB Bank estimated the sale proceeds would ultimately be worth about $4.5b to the economy, with farmer shareholders receiving an average tax-free payout of about $392,000 if the sale went ahead.
The sale to the world’s biggest dairy group, French-based Lactalis, is the final step in Fonterra’s transition to a slimmed-down New Zealand-based supplier of raw ingredients and high-value products to other manufacturers.
I think this one is interesting. There was a post the other day about how NZ makes raw materials then ships it to other countries for them to create the high value products.
Fonterra is literally selling the high value part to focus on the raw material part.
That seems like the dumbest decision ever. A perfect example of short term thinking. Go to any country in Europe and they will have a hundred different kinds of cheeses representing every nook and cranny of the country. Each cheese has a story about the climate or the cows or grass or the air or the aging or whatnot and as a result they cost a premium. We just sell the milk powder, they make artisan bespoke cheese and sell it back to us.
They probably don’t sell it back in a lot of cases as we have all sorts of rules around pasteurisation of imported products don’t we? Which would also mean they’re not using our milk powder to make any high value cheese / butter type products either.
I would expect most of the ingredients business goes into milk powders, baby formulas, sports supplements and then as inputs to bulk production - say cheese flavourings, bulk cheeses or butter/margarine mixes etc.
ETA - as an example, Buldak’s Carbonara noodles are listed on Fonterra’s marketing as using some of their bulk ingredients for the creamy flavour. So think packet mac 'n cheese & stuff like that :)