Fonterra sells Australian yoghurt business

Fonterra Co-operative Group has sold its Australian yoghurt and dairy dessert business to Parmalat Australia.

The sale includes Fonterra’s manufacturing sites at Tamar Valley and Echuca as well as its Australian yoghurt and dairy dessert brands, Tamar Valley and Ski. New Zealand-based Fonterra said the sale is part of its plan to return the co-operative’s Australian business to “strong and sustainable profitability”, which it outlined in September.

Theo Spierings, Fonterra CEO, said 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.

“We are focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and streamlining operations to match, and investing in higher value add products that will deliver the best returns for our farmer shareholders and unit holders.

“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,” Spierings said.

Fonterra Oceania MD, Judith Swales, said Fonterra will continue to invest in programs and innovations that support key brands and retail categories, including Western Star butter and Perfect Italiano, Mainland and Bega cheeses, Anchor cream, and fresh milk.

“Divesting the yoghurt and dairy desserts 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,” Swales said.

The sale is expected to be completed in the first half the of the 2016 calendar year.

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