Fonterra trims board size
Fonterra’s board has been reduced to nine - comprising six farmer-elected and three appointed directors.
Last week, Fonterra chairman John Monaghan announced the co-op was looking at selling Tip Top.
The co-op has appointed FNZC as an external advisor to work with as it considers a range of options.
“We want to see Tip Top remain a New Zealand based business and this is being factored into our options.
“While performing well, Tip Top is our only ice cream business and has reached maturity as an investment for us. To take it to its next phase successfully will require a level of investment beyond what we are willing to make.”
Fonterra's decision to sell the iconic Tip Top Ice Cream business should be a commercial one, says investment broker Grant Williamson, Hamilton Hindin Greene.
He says Tip Top may be a great brand but the question is whether the business fits Fonterra’s strategy in the future.
“I can understand it being an iconic brand but... the decision should be in the best interests of its farmer shareholders,” he told Dairy News.
Williamson says if Fonterra gets a good offer for the business, it should sell. Fonterra also definitely needs a stronger balance sheet.
The co-op is hoping to reduce its debt by $800m this year, by reducing costs and selling assets.
But Fonterra’s announcement triggered an angry response on social media.
On Twitter, a petition was launched by Taranaki farmer Matthew Herbert to block the sale of Tip Top now has thousands of signatures. The peititon explains why Fonterra looking at selling its Tip Top ice cream brand is an issue for its farmers.
“Kiwi’s eat more ice cream per person than any other country on earth,” it says.
“Tip Top ice cream is one of the biggest links between fresh New Zealand milk from Fonterra farmers and people who live in our cities.
Sign the petition and help farmers save Tip Top from the chopping block! Lets tell Fonterra to hold onto Tip Top and keep our delicious ice cream going from farm to freezer.”
Another Twitter user, @caroljubes, said that if Tip Top wanted to increase revenue without spending lots of money it should bring back ‘Strawberry Toppa’.
If tip top wanna increase revenue this summer, possibly enough that no large scale investment is required, all they need to do is bring back the Strawberry Toppa. That'll do it. Best ice cream they ever made.
— blackforestcarole (@caroljubes) December 5, 2018
Another Twitter user, @dairymanNZ, blasted Fonterra for thinking about selling Tip Top.
And selling the thing that resonates most positively with the NZ public in a climate where dairy farming is viewed negatively is... not smart
— DairyHam (@dairymanNZ) December 5, 2018
He later added...
I suspect Fonterra are severely underestimating the goodwill Tip Top generates for us with Kiwis https://t.co/chPmKULAy8
— DairyHam (@dairymanNZ) December 5, 2018
