Fonterra’s Kiwi farmer shareholders approve Lactalis sale
The $NZ4.22bn sale of the Mainland Group to French giant Lactalis has been described as an “outrageous shortsighted sugar hit” by Kiwi leaders.
Fonterra’s New Zealand farmer shareholders have given the green light to sell its consumer and associated businesses to French giant Lactalis, sparking criticism from Kiwi leaders.
More than 88 per cent of total farmer votes supported the $NZ4.22b ($A3.68b) divestment, the final step in the long-running process towards Lactalis ownership of assets including Fonterra’s Australian arm.
New Zealand financier ASB Bank estimated prior to the vote that Lactalis sale proceeds would be worth about $NZ4.5bn ($A3.95bn) to the NZ economy, with Kiwi farmer shareholders receiving an average tax-free payout of about $NZ392,000 ($A344,000).
Fonterra chairman Peter McBride welcomed the “strong mandate” with the final votes on the divestment cast at an online special meeting held on Thursday morning.
“We’ve been pleased to see so many farmers joining in the discussions since the start of this process in May last year when we first announced the decision to explore divestment options, and especially over the past month or so when the full details have been available,” he said.
“We’re pleased to have received a strong mandate, with 88.47 per cent of the total farmer votes cast in support of the recommendation and 80.59 per cent participation based on milk solids voted.”
The threshold required to approve the sale was for more than 50 per cent of the votes from those entitled to vote, based on share-backed per kilogram milk solids.
Mr McBride said Fonterra expected the Lactalis transaction to complete in the first half of the 2026 calendar year.
Several New Zealand leaders from both sides of the political divide, including former Labour PM Helen Clark and NZ First leader Winston Peters have criticised the divestment.
Mr Peters described the decision as “economic self-sabotage” on social media this week.
“This is an outrageous shortsighted sugar hit that is just giving away New Zealand’s added value to a company from a major EU country. There is now no long term security for New Zealand’s farmers,” the former NZ Deputy PM said.
Lactalis is on track to acquire four Victorian factories as part of the multi-nation transaction — at Cobden, Stanhope and Darnum, as well as Bayswater in Melbourne’s eastern suburbs.
Last month, United Dairyfarmers of Victoria president Bernie Free said there was concern from farmers across state borders that factories may shut as a result of the merger.
He noted Bega’s announced snap closure of its Strathmerton factory in May, with the loss of 300 jobs, as tangible indicator of dairy sector consolidation.
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