Fonterra signs agreement to sell to Parmalat

Fonterra Co-operative Group announced the intention to sell its Australian yogurt and dairy desert business to Parmalat Australia. The transaction, which is conditional on regulatory and other approvals, is expected to be completed in the first half of 2016.

Theo Spierings, chief executive says these changes were the result of driving a clear strategic plan to transform the Australian business to deliver stronger returns to farmer shareholders and unit holders. He notes, “Australia is our largest milk pool outside New Zealand, and is an integral part of our multi-hub strategy. Our Australian operations have particular ingredient strengths in cheese, whey and nutritionals, complemented by our strong consumer and foodservice businesses. As a key part of our multi-hub strategy, we are matching these strengths with the opportunities across our 100 markets.”

Fonterra managing director Oceania Judith Swales said Fonterra is totally committed to the Australian dairy industry and its retail business, and the divestment is a decisive step to lock in our competitive position in the Australian consumer market.

“We will continue investing in programs and innovation that supports our market leading brands in key retail categories, including Western Star butter and Perfect Italiano, Mainland and Bega cheeses, Anchor cream, and fresh milk.

“Divesting the yogurt and dairy deserts business will allow us to focus on what we do best, so we can continue delivering a competitive milk price to our suppliers, benefits to our customers, innovative dairy foods to our consumers, and improved returns to our farmer shareholders and unit holders, concludes Swales.

All Fonterra’s Echuca and Tamar Valley employees in the yogurt and dairy desert business have received offers of employment from Parmalat.