October 29, 2025 • 6 mins
Fonterra’s chief executive comments on the overwhelming YES vote from Fonterra farmer shareholders to sell the consumer brands business to Lactalis. The deal was expected to deliver a tax-free capital return of about $3.2 billion to 8000-plus shareholding farms throughout New Zealand. The average return to farmer shareholders would be around $392,000. That’s about 0.7% of GDP. But not everybody’s happy. Just ask Winston!
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Episode Transcript
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Speaker 1 (00:00):
But let's kick off the show and welcome on to
the show the chief executive of Fonterra, Miles Hurrell. No
surprise in the outcome of this vote, Miles Hurrell, and
no surprise in the reaction from Winston Peters. Good afternoon,
good eyes moon, Jamie.
Speaker 2 (00:16):
Yeah, a look an overwhelming result that's come through from
our shielders this morning. And when you say no surprise,
I mean see bit of work's gone to that. What
we've been out there talking to to farmers for a
few months on this now and around your frame of
farmer meetings, sheared meetings, webinars and so you know, we've
cleared for all the questions I've gotten. So the number
(00:37):
of eighty eight percent in support, you know, gives us
the thumbs up.
Speaker 1 (00:41):
Well, you're selling yourself short. Eighty eight and a half
percent there, Miles Hurrell. It's an overwhelming Yes, no surprise.
This will This will put three point two billion dollars
into the New Zealand economy. That's that's how much is
going back to the farmer shareholders two dollars per share
tax free. This talk of that lifting New Zealand's GDP
(01:02):
by zero point seven percent. This could be a huge
kick in the backside in the right way for our economy.
Speaker 2 (01:09):
Well did you say, I mean the New zeal economies
not had them any great shape, and so the royal
set is certainly doing the heavy lifting. So you know,
three point two billion dollars by way of tax free
capital term will certainly help, I think, but least all
loose sight. You know, we sold this business for four
point two billion, so you know there's another sort of
seven hundred to a million by the time you remove
the costs that also go into the news on the economy.
(01:31):
I suspect over time when you start thinking about these
things that will continue to invest in that support our
ongo ingredients and food service business.
Speaker 1 (01:38):
I see Nick Tuffley from ASB said there will be
three point two billion going to your eight thousand shareholder
farms in New Zealand. That average is just under four
hundred thousand dollars per farm. Around sixty percent of shareholding
farms could receive at least two hundred thousand. Obviously some
of the bigger ones are going to get quite a
(01:59):
windfall on this. What is the timeframe when do Fonterra
farmers get this money in their hot little hands.
Speaker 2 (02:06):
Yeah, so certainly today's she hold A meeting was one
of the big milestones which obviously passed. Now then we
go into sort of the regulatory peace around the world,
and so each each market will a number of markets
have their own regulatory approvals required, and they're coming through
sort of as we speak, on a day by day basis.
And then we need to go through the sort of
the separation and by that I mean you know, physical
(02:28):
office separation, IT systems and those sort of things. So
we're still talking calendar year twenty twenty six. You know,
I'd like to think early part of that calendar year
sort of quarter one, quarter two, but are We're going
to come out sometime in early December with a bit
of an update as to how that looks, But certainly
in that first half of twenty six is what I'm
aiming for.
Speaker 1 (02:47):
Well, let me just quote Winston Peter's back at you,
because there's always two sides to an argument, he said
very recently on Facebook. Fonterra shareholders have decided to sell
iconic dairy brands Mainland Anchor, Carpitty and others to the
French firm Luck to Leise, this is ut of madness,
it's economic self sabotage. It's an outrageous, short sighted sugar hit.
(03:12):
What do you say in your defense?
Speaker 2 (03:14):
Yeah, well, of course, a big question that farmers have
asked right the way through this process, what does the
cop look like long term? And we've always said that
this consumer business is about seven or eight percent of
our milk, so it's important part, but it's not the
biggest chunk of our business. And where we've always made
the return to the ingredients in our food service business.
And so you know, painting that long term picture, yes,
(03:36):
is that there's a whole lot of cash that to
go back to our shielders in the short term. But
at the same time, how do we reinvest more of
their capital into projects that offer a greater return. So
you know, I totally disagree with this you as you
so surprised me quite frankly.
Speaker 1 (03:49):
Though he's saying luck to lease can begin, or to
let me rephrase that, he says, luck to lese can
three years into the steal decide to terminate the milk
supply to these brands. So he thinks it's short term
gain for long term pain. And also, I don't know
whether you want to go down this track. He's kind
of having a shot at you and the board and
(04:12):
your your incentives bonus and centers forgetting the steel through.
Speaker 2 (04:18):
Yeah, well, or so first in the milk supply agreement's
a ten year deal. I think we're being very clear
in the notice of meeting and all the conversation with farmers.
Their ingredients business is a three year deal with a
three year notice period. But the owners comes back on
us as an organization to say, you know, how we
how do we work with our with our key ingredients
or a key B to B customers, And so you know,
(04:39):
they could take their milk away and buy it from
someone else, but at the same time you so could
necessily soak at others. And it's our job to make
sure that they remain remain with us by treating them respectfully,
treating them as a key ongoing customer of ours. And
of course they're wanting to buy these brands, not just
for the brand, just for the people. They wanted to
buy us for the new Zimmer province. Also, you know,
(05:00):
I'm confident in the long term position here.
Speaker 1 (05:03):
If I was a fun tier a farmer shareholder, and
I'm not Miles Hurrah I'd be pretty pleased with the
way you and Peter McBride are running the show. Instance,
saying where will you be in a few years time,
You'll be out of here with your bonus. He's really
having a crack at you.
Speaker 2 (05:17):
Yeah, but we've also been very clear there are no
executive bonuses linked to the sale process, and so you
know we're not even gett entertained that conversation. Who knows
where we'll be in ten year time here, it's a lot,
it's a long time down the line. But I'm focused
on the here and now. I'm loving the job and
loving what I'm doing. And you know, Farmer is a
supportive of the direction of travel, as you've seen with
(05:37):
an eighty eight and a half percent vote that came
through this morning and.
Speaker 1 (05:40):
Overwhelming yes folk, just before I let you go, tough
times for some of your Farmer's shareholders, especially in the
South Island, Southland, Southwest, Otago, Canterbury. How's the recovery going?
Speaker 2 (05:52):
Yeah, but being really roughy on there for those guys,
no question. I think a couple of days ago we
were just under sort of two hundred farms. I think
that without power, I think last countless mornings around fifty,
so that those numbers are coming down. But even one
farm without power is a disaster for that individual farm,
So we're supporting them the best we can. I think
from what I'm seeing the way that the industries come together,
(06:14):
whether it be the irrigation companies and the third companies
and farm source, all the people come together to try
and support these farms the best we can. But yeah,
a rough time, no question.
Speaker 1 (06:24):
Hey Miles Harrell to you and the team at font TIRA, congratulations.
This is a good result and it's a good result
for New Zealand in and our economy.
Speaker 2 (06:33):
Yeah, thanks so much.
But let's kick off the show and welcome on to
the show the chief executive of Fonterra, Miles Hurrell. No
surprise in the outcome of this vote, Miles Hurrell, and
no surprise in the reaction from Winston Peters. Good afternoon,
good eyes moon, Jamie.
Speaker 2 (00:16):
Yeah, a look an overwhelming result that's come through from
our shielders this morning. And when you say no surprise,
I mean see bit of work's gone to that. What
we've been out there talking to to farmers for a
few months on this now and around your frame of
farmer meetings, sheared meetings, webinars and so you know, we've
cleared for all the questions I've gotten. So the number
(00:37):
of eighty eight percent in support, you know, gives us
the thumbs up.
Speaker 1 (00:41):
Well, you're selling yourself short. Eighty eight and a half
percent there, Miles Hurrell. It's an overwhelming Yes, no surprise.
This will This will put three point two billion dollars
into the New Zealand economy. That's that's how much is
going back to the farmer shareholders two dollars per share
tax free. This talk of that lifting New Zealand's GDP
(01:02):
by zero point seven percent. This could be a huge
kick in the backside in the right way for our economy.
Speaker 2 (01:09):
Well did you say, I mean the New zeal economies
not had them any great shape, and so the royal
set is certainly doing the heavy lifting. So you know,
three point two billion dollars by way of tax free
capital term will certainly help, I think, but least all
loose sight. You know, we sold this business for four
point two billion, so you know there's another sort of
seven hundred to a million by the time you remove
the costs that also go into the news on the economy.
(01:31):
I suspect over time when you start thinking about these
things that will continue to invest in that support our
ongo ingredients and food service business.
Speaker 1 (01:38):
I see Nick Tuffley from ASB said there will be
three point two billion going to your eight thousand shareholder
farms in New Zealand. That average is just under four
hundred thousand dollars per farm. Around sixty percent of shareholding
farms could receive at least two hundred thousand. Obviously some
of the bigger ones are going to get quite a
(01:59):
windfall on this. What is the timeframe when do Fonterra
farmers get this money in their hot little hands.
Speaker 2 (02:06):
Yeah, so certainly today's she hold A meeting was one
of the big milestones which obviously passed. Now then we
go into sort of the regulatory peace around the world,
and so each each market will a number of markets
have their own regulatory approvals required, and they're coming through
sort of as we speak, on a day by day basis.
And then we need to go through the sort of
the separation and by that I mean you know, physical
(02:28):
office separation, IT systems and those sort of things. So
we're still talking calendar year twenty twenty six. You know,
I'd like to think early part of that calendar year
sort of quarter one, quarter two, but are We're going
to come out sometime in early December with a bit
of an update as to how that looks, But certainly
in that first half of twenty six is what I'm
aiming for.
Speaker 1 (02:47):
Well, let me just quote Winston Peter's back at you,
because there's always two sides to an argument, he said
very recently on Facebook. Fonterra shareholders have decided to sell
iconic dairy brands Mainland Anchor, Carpitty and others to the
French firm Luck to Leise, this is ut of madness,
it's economic self sabotage. It's an outrageous, short sighted sugar hit.
(03:12):
What do you say in your defense?
Speaker 2 (03:14):
Yeah, well, of course, a big question that farmers have
asked right the way through this process, what does the
cop look like long term? And we've always said that
this consumer business is about seven or eight percent of
our milk, so it's important part, but it's not the
biggest chunk of our business. And where we've always made
the return to the ingredients in our food service business.
And so you know, painting that long term picture, yes,
(03:36):
is that there's a whole lot of cash that to
go back to our shielders in the short term. But
at the same time, how do we reinvest more of
their capital into projects that offer a greater return. So
you know, I totally disagree with this you as you
so surprised me quite frankly.
Speaker 1 (03:49):
Though he's saying luck to lease can begin, or to
let me rephrase that, he says, luck to lese can
three years into the steal decide to terminate the milk
supply to these brands. So he thinks it's short term
gain for long term pain. And also, I don't know
whether you want to go down this track. He's kind
of having a shot at you and the board and
(04:12):
your your incentives bonus and centers forgetting the steel through.
Speaker 2 (04:18):
Yeah, well, or so first in the milk supply agreement's
a ten year deal. I think we're being very clear
in the notice of meeting and all the conversation with farmers.
Their ingredients business is a three year deal with a
three year notice period. But the owners comes back on
us as an organization to say, you know, how we
how do we work with our with our key ingredients
or a key B to B customers, And so you know,
(04:39):
they could take their milk away and buy it from
someone else, but at the same time you so could
necessily soak at others. And it's our job to make
sure that they remain remain with us by treating them respectfully,
treating them as a key ongoing customer of ours. And
of course they're wanting to buy these brands, not just
for the brand, just for the people. They wanted to
buy us for the new Zimmer province. Also, you know,
(05:00):
I'm confident in the long term position here.
Speaker 1 (05:03):
If I was a fun tier a farmer shareholder, and
I'm not Miles Hurrah I'd be pretty pleased with the
way you and Peter McBride are running the show. Instance,
saying where will you be in a few years time,
You'll be out of here with your bonus. He's really
having a crack at you.
Speaker 2 (05:17):
Yeah, but we've also been very clear there are no
executive bonuses linked to the sale process, and so you
know we're not even gett entertained that conversation. Who knows
where we'll be in ten year time here, it's a lot,
it's a long time down the line. But I'm focused
on the here and now. I'm loving the job and
loving what I'm doing. And you know, Farmer is a
supportive of the direction of travel, as you've seen with
(05:37):
an eighty eight and a half percent vote that came
through this morning and.
Speaker 1 (05:40):
Overwhelming yes folk, just before I let you go, tough
times for some of your Farmer's shareholders, especially in the
South Island, Southland, Southwest, Otago, Canterbury. How's the recovery going?
Speaker 2 (05:52):
Yeah, but being really roughy on there for those guys,
no question. I think a couple of days ago we
were just under sort of two hundred farms. I think
that without power, I think last countless mornings around fifty,
so that those numbers are coming down. But even one
farm without power is a disaster for that individual farm,
So we're supporting them the best we can. I think
from what I'm seeing the way that the industries come together,
(06:14):
whether it be the irrigation companies and the third companies
and farm source, all the people come together to try
and support these farms the best we can. But yeah,
a rough time, no question.
Speaker 1 (06:24):
Hey Miles Harrell to you and the team at font TIRA, congratulations.
This is a good result and it's a good result
for New Zealand in and our economy.
Speaker 2 (06:33):
Yeah, thanks so much.
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