Fonterra’s chief executive has admitted the company’s proposal to sell of a number of its well-known brands has been met with a small amount of resistance from people with “emotional connections to these brands” amid a “generally positive” response from shareholders.
The dairy cooperative announced last week it’s looking to sell all or part of its global consumer business as it shifts its focus to becoming a global business-to-business provider of dairy nutrition products.
Fonterra’s consumer business brands included Anchor, Mainland, and Kāpiti among others.
Fonterra CEO Miles Hurrell told 1News today that the reaction from farmers and other shareholders has “generally been positive”, adding the “backbone” of the company “has always been” the business-to-business side.
“There’s always the odd person that gives a concern when it comes to the iconic brands in New Zealand,” Hurrell later added.
“We understand and acknowledge that, and I think it actually shows the importance of what we’ve done to grow those brands.
“So we should take pride in that fact – but at the same time we need to acknowledge and understand that people have emotional connections to these brands, and recognise that as well.”
Where to from here?
“We announced last Thursday that we are embarking on this review of the business, to have a good look,” Hurrell said.
“We’re in day two or day three of that, so it’s too early to say who will come out of the woodwork as a potential buyer.
“Overwhelming positive [feedback from farmers and shareholders] at this point in time.”
Hurrell expected it to be 12-18 months before “we see any sort of movement in this area” – “but the work starts now”.
And the money from any potential sale “could go anywhere”, he added.
“At one end of the spectrum, farmers, shareholders may look for a return,” Hurrell said.
“Or at the same time, we could invest in some growth projects.
“We need to start engaging with the bankers and understanding the international market to see who may be a potential suitor but, until we get through that phase, it’s too early to start to communicate anything more to our farmers.”
The proposed sale would require shareholder support.
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