Australian Dairy Farmers (ADF) is deeply disappointed that the Fonterra Board has approved the sale of its global Consumer, Oceania, and Sri Lanka businesses to the world’s largest dairy company, Lactalis.
In July, the Australian Competition and Consumer Commission (ACCC) flagged it would not oppose the acquisition. Following this week’s Fonterra Board decision, the final hurdle for the sale is now approval from Fonterra’s farmer shareholders in New Zealand.
ADF President Ben Bennett said New Zealand farmers will closely scrutinise the deal’s merits.
“It’s going to take some convincing for the NZ farmer to support it; it’s not a fait accompli,” Mr Bennett said.
“As a Kiwi who is dairy farming in Australia, I know farmers on both sides of the ditch will have strong feelings on this deal.
“Here in Australia, we know it limits competition. In New Zealand, farmers will be looking to maximise their returns when this goes to a vote in late October or early November.
“The ACCC said it isn’t going to affect competition in the domestic milk market, but we very much disagree. “Combining two major buyers reduces choice and bargaining power for farmers along a supply chain already dominated at the processor and retail end. It’s a major threat to farm gate prices and the Australian dairy industry.”