Fonterra to sell Australian ice cream business to Nestle, Bulla

Wednesday 29th April 2009

Fonterra Cooperative Group agreed to sell its Australian ice cream businesses to Nestle and Bulla Dairy Foods, resulting in 140 jobs being eliminated at the co-op’s Balcatta plant in Western Australia.

No price was given for the sale. At the same time, Fonterra is reviewing its ownership of regional liquid milk businesses in Australia to focus on cheeses, spreads, yoghurts and dairy desserts, the Auckland-based company said in a statement.

Fonterra will sell its Peters and Connoisseur brands to Nestle and will sell its license to manufacture and market the Cadbury ice cream range in Australia to Regal Cream Products, a unit of Bulla. The agreements are subject to regulatory approval.

Nestle is expected to combine Peters and Connoisseur into its national ice cream business, manufactured at Mulgrave in Victoria.

Fonterra Australia New Zealand managing director John Doumani said there would be no impact on milk supply arrangements for dairy farmers in Western Australia, where it collects more than 130 million litres of milk a year. It would still need the milk for its Browne’s brand portfolio, Doumani said.

Outside of Western Australia, Nestle already owns the Nestle brand and the sale “made good business sense,” Doumani said.

Fonterra's Tip Top ice cream operation in New Zealand and its remaining West Australian dairy business were unaffected, he said.

Businesswire.co.nz

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