Fonterra July NZ milk collection rises 1% y/y

Fonterra July NZ milk collection rises 1% y/y

New Zealand's dairy cooperative Fonterra Co-operative Group reported a 1% increase in milk collection for the month of July 2025 compared to the same period last year. This rise is a positive sign for the dairy giant, which is currently undergoing significant structural changes, including the sale of its global consumer brands to French dairy major Lactalis [1].

The increase in milk collection comes as Fonterra prepares to sell its global consumer and associated businesses to Lactalis for NZ$3.845 billion ($2.24 billion) [1]. The deal, which is subject to shareholder and regulatory approvals expected in October or November, is expected to be completed in the first half of 2026 [2]. The sale includes long-term commitments to purchase milk from Fonterra, ensuring that New Zealand farmers will continue to benefit from the success of the divested brands [1].

Fonterra's chief executive Miles Hurrell stated that the sale agreement is a great outcome for the co-op, noting that Lactalis, as the world’s largest dairy company, has the scale required to take these brands to the next level [2]. The divestment is also conditional on separation of the businesses from Fonterra and no material adverse change arising before completion [2].

Despite the positive news, Fonterra's market share in the raw milk market remains a concern for regulators. A recent meeting between Nicola Willis, the Minister of Finance, and Fonterra bosses highlighted the lack of competition in the dairy market, which may be contributing to high consumer prices [3]. The minister raised concerns about the lack of retail competition and the dominance of Fonterra in the market, noting that New Zealanders pay roughly 30% more than the OECD average for dairy products [3].

Fonterra's earnings per share for the fiscal year 2026 are expected to be presented on a continuing operations basis and exclude the performance of the Consumer and associated businesses during the pre-completion period [2]. The co-op's previously announced FY25 earnings guidance of 65-75 cents per share remains unchanged [2].

References:
[1] https://www.thecattlesite.com/news/fonterra-to-sell-consumer-brands-to-lactalis
[2] https://www.1news.co.nz/2025/08/22/fonterra-to-sell-consumer-businesses-including-mainland-and-anchor-for-38b/
[3] https://newsroom.co.nz/2025/08/27/minister-raises-competition-concerns-in-fonterra-meeting/