Fonterra completes sale of Mainland Group to Lactalis

NEW ZEALAND – Fonterra Co-operative Group Ltd has completed the sale of its global consumer and associated businesses, Mainland Group, to Lactalis.

The sale comprises Fonterra’s global Consumer business and Consumer brands (excluding the consumer business in Greater China, where Fonterra will continue to own the Anchor brand), the integrated Foodservice and Ingredients business in Oceania, the integrated Foodservice business in Sri Lanka and the Middle East and Africa Foodservice business.

Chairman Peter McBride noted that the completion of the sale is a significant milestone which sets the Co-op up for the future.

He added that through the company’s high-performing Ingredients and Foodservice businesses, they will sell innovative dairy products to customers globally under NZMP and Anchor Food Professionals brands.

“With the divestment complete, Fonterra can return capital to its owners and focus on growing further through its core business as a New Zealand farmer-owned global B2B dairy provider. We can now focus our resources, R&D spend, and farmers’ capital on continuing to grow these businesses, which generate the greatest return for farmers’ milk.”

The product supply agreements between Fonterra and Lactalis include a raw milk supply agreement, under which Fonterra is to supply raw milk to Lactalis for a minimum term of 10 years, with automatic renewal until terminated.

The second agreement is the global supply agreement, whereby Fonterra will supply ingredients and other products (e.g. bulk cheese) to Lactalis for a minimum period of 6 years, with automatic renewal until terminated.

The sale comes after the resignation of Chief Executive Officer Miles Hurrell, who had served for 25 years.

Peter McBride, Chair of Fonterra, said that Hurrell’s career with the co-operative spanned 25 years.

“When he was appointed CEO in 2018, Miles was tasked with leading a reset of the business to turn around Fonterra’s financial performance and rebuild farmers’ trust.

Since his appointment as CEO in 2018, Miles Hurrell has led Fonterra from a loss-making business to a profitable global dairy player.

Hurrell took over the reins from Theo Spierings, who oversaw Fonterra’s expansion into China and consolidated the co-op’s operational structure from four separate divisions into a single umbrella group.

Over his eight years as CEO, Hurrell focused on simplifying Fonterra’s structure through strategic divestments.

This included divesting New Zealand ice cream brand Tip Top to Froneri, selling its stake in pharmaceutical company DFE, selling its joint-venture farms in China and its stake in infant formula maker Beingmate, exiting a joint venture with Nestlé in Brazil, and divesting its Chile business, Soprole.

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