New Zealand dairy giant Fonterra has announced it was considering its Australian business on the stock exchange as it looks to focus on its core New Zealand business.
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Fonterra Australia said it was investigating several options, including listing on the stock exchange or inviting another major investor to buy into the business. But the co-operative was looking to retain a significant stake in the Australian arm and would not consider splitting the consumer business from its ingredients side.

Australia would remain an important market for Fonterra as it exports large volumes of butter and cheese into the country from its New Zealand business.

And a move to Australian ownership could help to regain trust in Australia following the company’s actions in the dairy crisis of 2016 when it retrospectively cut its milk price to farmers.

Fonterra chief executive Miles Hurrell said: “Fonterra Australia is on strategy for the co-op and remains an important export market for our New Zealand milk, especially for foodservice products and advanced ingredients.”

Mr Hurrell said freeing up capital would be critical to enabling greater focus on New Zealand milk.

“Our focus on New Zealand milk, sustainability, and innovation and science will see us shift every aspect of our business to create more value,” he said.

Financial performance

“In doing so, we aim to continue to improve our financial performance and, as a result, strengthen our ability to repeatedly generate cash and create value for our shareholders and New Zealand.”

Australian Dairy Farmers president Terry Richardson said Fonterra was important to the Australian dairy industry.

“Time and time again, Fonterra has reaffirmed its commitment to the Australian dairy industry,” he said.

“On this basis, Australian Dairy Farmers looks forward to the contribution Fonterra will continue to make to our industry and in particular to the dairy farmers in Australia who supply milk to the company.”

The company said it would be working through available options pre-Christmas, with a view to announcing its preferred option in 2022.

Farmers say no relief is in sight.

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