Miles Hurrell: Fonterra CEO on the company selling off its consumer brands

Fonterra's farmer shareholders should get a decent payout from the sale of consumer brands like Anchor and Mainland.

They've overwhelmingly voted for a $4.2 billion dollar sale to French company, Lactalis.

ASB economists predict the sale will deliver a tax-free capital return of $3.2 billion - or $400,000 per farmer. 

Chief executive Miles Hurrell says that's close, with a wide spectrum of farm sizes. 

"Everyone will get their own cash in time accordingly, but yeah, $2 tax-free per share is a decent wedge of cash for most farmers."

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Episode Transcript

Speaker 1 (00:00):
Good afternoon, has expected the Ponterra sale has been voted
through and overwhelmingly eighty eight and a half So eighty
eight point five percent of Fonterra's farmer shareholders have said
yes to selling the company's consumer brands to the French company.
Miles Hurral is Fonterra's chief executive and with us high Miles.

Speaker 2 (00:16):
Good afternoon.

Speaker 1 (00:17):
So is this more supportable around about what you were expecting?

Speaker 2 (00:20):
Well, we always said we wanted a strong mandate. I
mean it is a massive decision for the cooperative NF
farm own and so we wanted a strong mandate. But
you to see the number comes through. Eighty eight and
a half percent is a great support.

Speaker 1 (00:31):
Is asb right on how much it's predicting farmers will
get on average just shy of four hundred thousand.

Speaker 2 (00:37):
Yeah, it depends what's the way you cut it. But
that's the number that I've seen, which is sort of
near enough to on an average. Of course, we do
have a wide spectrum of smaller farmers in large farmers,
so evene will get their own their own cash and
time accordingly. But your two dollars tax free per per
per share is a decent wedge of cash for most farmers.

Speaker 1 (00:55):
Miles, is there any chance at all that Winston Peters
is proven right in the passage of time that we
come to regret this.

Speaker 2 (01:03):
Well, Look, we pride ourselves on our business to business relationships.
And you think about the multinationals that we have partnerships
or whether it be Abbott or whether it be Nesle
or Deno, whoever it may be. At an international basis,
we sell them ingredients, we sell them advanced ingredients, we
sell them food service product and it's our job to
make sure that maintains through the long term. And we

(01:23):
pride ourselves and doing it. And I think we can
do that well into the future.

Speaker 1 (01:26):
The way that Winston Peters is talking about it makes
me think this might become an election issue. What do
you think?

Speaker 2 (01:31):
Oh, look, I think if we had got just over
the fifty percent that we needed from our farmers to
get this underway, it maybe he have a view. But
you know, this business is owned by our farmers. They've
invested behind that business and they've given us the mandate.
So at the end of the day, you know, whether
he takes it into an election is up to him.
But I think our farmers have made a pretty clear

(01:51):
decision today. Yeah.

Speaker 1 (01:52):
Now, last time I talked to you about it, which
was the day that you announced this, you hadn't cracked
the bubbles yet. It was far too early. Is today
the day to crack the.

Speaker 2 (01:59):
Bub Maybe not quite half LEAs through a meeting actually,
So I've got a bit more to do yet. But
look that there's still a couple of milestones we need
to get through. Firstly, there is some international regulatory approvals
that in certain markets that they're well underway. And then
there's quite a significant separation piece, you know, you think
about physically separating officers and IT systems and all that
sort of thing. So we're probably going to be into

(02:20):
the new year before we see that come to pass.

Speaker 1 (02:23):
So the bubbles are in the new year, are they?

Speaker 2 (02:26):
Well, I might have something over the new year break even,
but yeah, that's that's certainly the plan. But you know
it is it is a significant milestone in this process.
You know, we've been on this program for about eighteen
months and so you know, it's a significant milestone. So
maybe we can find it find some time over the weekend.

Speaker 1 (02:41):
I think you should, Miles, you look after yourself and
enjoy it Myles Harrell, chief executive Fonterra. For more from
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