Winston Peters slams Fonterra’s sale to Lactalis as “utter madness”
NZ First leader Winston Peters has continued his criticism of Fonterra to sell its brand business to the French company Lactalis, saying the move is "utter madness".
Rabobank's annual Global Dairy Top 20 report released last month shows organic growth and a global mergers and acquisition strategy helped Lactalis unseat Nestlé.
In 2000, privately-owned Lactalis was placed ninth on the list with a turnover of US$4.8 billion.
Last year, its revenue totalled US$23b compared to Nestlé at just under US$21b.
Fonterra retains its sixth placing with total revenue of US$13.6b.
Lactalis, owned by the Besnier family, has a presence in Australia; it became a major shareholder in Parmalat's Australian business in 2011 before buying out the business in 2019.
The Rabobank report says, since 2010, Lactalis has grown its empire by adding about 60 deals, expanding its global footprint in the Middle East, Africa and North and South America.
Its pending purchase of Kraft Heinz natural cheese business and other businesses in Europe will boost revenue by another US$2.5b and extend the company's ranking next year.
The third place in the rankings has been retained by Dairy Farmers of America, the US' largest dairy co-op.
French company Danone and Chinese dairy giant Yili, which owns Westland Milk, Hokitika round up the top five.
European co-ops FrieslandCampina and Arla Foods feature seventh and eighth respectively.
The Rabobank report shows that in 2020, dairy companies faced significant challenges due to the Covid-19 pandemic, but overall, the sector fared better than expected.
The combined turnover of the top 20 industry leaders fell by just 0.1% in US dollar terms, following the prior year's 1.8% gain. In euro terms, the combined turnover decreased by 1.9%.
Merger and acquisition activity slowed in 2020, with approximately 80 announced deals versus the prior year's 105. Activity picked up in 2021, with over 50 deals announced through midyear.
Sustainability A Winner
The Rabobank report shows that in 2020, dairy companies faced significant challenges due to the Covid-19 pandemic, but overall, the sector fared better than expected, demonstrating its resilience.
The pandemic also heightened consumers' awareness of environmental challenges. A focus on sustainability was a winner for dairy companies.
"Consumer sentiments are being heard, and many companies included in the Global Dairy Top 20 have made sustainability commitments for 2030 and carbon-neutrality commitments for 2050," according to Richard Scheper, Rabobank dairy analyst.
Sustainability-marketed US milk sales grew more than 20% from 2013 to 2018, compared to negative growth for the category as a whole.
Sustainability-marketed natural cheese and yogurt sales grew over 30% and 20% respectively, compared to near 10% growth for those categories broadly over the five-year period.
The report says dairy alternatives keep growing and blurring the definition of dairy.
The sales growth of liquid milk and yogurt alternatives - especially oat and almond based variants - have not gone unnoticed.
Most significantly, Danone's turnover in dairy alternatives, following its acquisition of WhiteWave Foods in 2017, was recorded at US$2.5b, a gain of 15% compared to the previous year.
