Lactalis cash to go on debt repayment and maintenance

Tuesday, 25 November 2025

Fonterra sold its consumer brands and associated businesses to French diary giant Lactalis for NZ$4.22 billion. The deal has been welcomed by Taranaki farmers.

Fonterra’s consumer brands selloff will net Taranaki’s dairy sector hundreds of millions of dollars, but farmers say there’ll be no spendup – the cash will be used to pay off debt and improve farm facilities.

The dairy giant’s farmer shareholders recently voted to sell its global consumer and associated businesses, including the much loved Mainland and Anchor brands, to French company Lactalis for NZ$4.22 billion.

Though the deal must still be approved by regulators, it was estimated about NZ$3.2b would be distributed across Fonterra shareholders nationally.

Taranaki’s 1700 farms were expected to get between $300,000 and $800,000 each, depending on the number of shares they held.

Manaia dairy farmer and former Taranaki regional councillor Michael Joyce voted in favour of the sale and said it could only be a positive move for the industry.

Manaia dairy farmer Michael Joyce says the sale can only be a positive move for the industry. (File photo)

“It’s going to enable us to do a combination of things, some of it will be debt repayment, some of it will be investing with a bit more confidence with a few things on farm,” he said.

“We’re personally determined to make sure that our facilities are as good as we can have them without being too over the top.”

The boost came after Fonterra delivered a record payout for the 2024-25 season, with the final Farmgate Milk Price at $10.16 per kilogram of milksolids.

It resulted in $15.3b in milk payments to farmers, a $3.8b increase compared with the previous season, driven by strong global demand for New Zealand dairy products.

Joyce, who owns two farms and manages around 800 cows, said Fonterra had demonstrated it could look after farmers and the payout was timely after the drought earlier this year.

“We’ve had the worst drought in 50 years, which has tempered the benefits from the higher milk price.

Farmer Deborah Clough says towns like Stratford, pictured, and Eltham will get a boost from the Fonterra sale’s capital injection.

“With the higher milk price, an element of that improved expenditure by farmers has already occurred.”

However, he said it would not solve Taranaki’s economic challenges because it was only a small part of the economy.

For Eltham farmer Deborah Clough the extra cash would go on paying back debt and farm maintenance.

She said her farm had lost “quite a bit of land” from July’s downpour and the money would also go towards improving the accommodation for her staff.

“We will spend what we have to, I like staff to be paid and comfortably living,” she said.

The money spent on maintenance would support local businesses in Stratford and Eltham while helping cover costs that have tripled, she said.

While nearly 90% of shareholders voted in favour of the sale, coastal dairy farmer Ray Barron was among those against it.

Ray Barron, left, was not in favour of the deal because he wanted to retain the brands for New Zealand’s benefit in the long term. (File photo)

He wanted to retain the brands locally so New Zealand could benefit from them in the long-term.

“I had a different take on it,” he said. “We’re having good times in farming at the moment – why do we need good cashflow at this time?

“Once it’s gone, it’s gone.”

But he understood why farmers would “take the cash and run with it” and agreed it was wise for it to be used for debt repayments.

Though there would be extra cash in the community, Shane Rooney, managing director of sales at Honda Hub in Hāwera, was not expecting much of an increase in sales at his store, which sells quad bikes, ATV and farm vehicles.

“I would have thought that it better go back to paying off a bit of debt and that sort of thing,” he said.

“It’s been a fairly tough last couple of years, like the payout’s come up but the cost of everything’s been up there too.”