Fonterra’s farmer shareholders have decisively approved the sale of brands such as Mainland and Anchor to the French company Lactalis.
Over 88% of the votes cast at a special meeting supported the sale.
The sale needed approval from more than 50% to pass.
“It helps to demonstrate one of the key things that sets us apart from most other processors – our farmers have a direct say in the future of their co-operative, and they’ve made the most of that opportunity,” Chairman Peter McBride said.
ASB Bank estimated the sale proceeds would eventually contribute around $4.5 billion to the economy, with farmer shareholders receiving an average tax-free payout of approximately $392,000 if the sale proceeded.
The sale to Lactalis marks the final stage in Fonterra’s shift to becoming a streamlined New Zealand-based supplier of raw ingredients and premium products to other manufacturers.
NZ First leader Winston Peters called the decision “utter madness” and “economic self-sabotage.”
“This is an outrageous short-sighted 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,” he said.
“Three years after this deal starts, Lactalis can begin the three-year notice to terminate the milk supply to these brands. Six years is meaningless for a long-term exporter. When it’s over, it really is over.”
“Meanwhile, Lactalis secures ten years of raw milk for its own consumer brands. It is astonishing that business commentators do not see the irony of this.”
Peters has earlier urged Fonterra to clarify the sale of its consumer businesses to the French dairy company Lactalis. However, the co-operative has responded that those explanations are already publicly available.
He also urged farmers to consider the deal “very carefully” and expressed concerns about the actual duration of the long-term agreement.