Fontera sells Brownes dairy in Australia

Fonterra has signed a binding agreement to sell its Brownes dairy business to DairyWest, owned by Australian private equity group Archer Capital. DairyWest will acquire the Brownes business, which is based in Western Australia and manufactures and sells white milk, flavoured milk, yogurt, dairy desserts, cream, custard, juice and bulk cheese, including the Brownes brand, the Chill flavoured milk brand nationally, and the Balcatta and Brunswick manufacturing sites.
The agreement, which is only conditional on the transfer of certain key contracts and the finalisation of transitional arrangements, is expected to become effective in early 2011.
Fonterra Brands Australia New Zealand managing director, John Doumani, says the decision to divest the business reflects Fonterra’s direction in Australia. “Our West Australian Brownes dairy business is a profitable business, with strong brands, consumer loyalty and a track record for innovation.
“However, fundamentally Brownes is a regional business and it is not receiving the right level of focus within Fonterra. Subsequently, the Brownes business will be better served as a stand-alone entity.