Fonterra to appeal Aussie court ruling
Fonterra says its ongoing legal battle with Australian processor Bega Cheese won’t change its divestment plans.
It will buy Lion Dairy’s everyday cheese business for A$137.5 million, the deal including Coon, Mil Lel and Cracker Barrel brands.
WCB will also take over Lion’s cut-and-wrap facility adjacent to WCB’s site at Allansford, Victoria. Lion manages cut-and-wrap for both businesses; WCB manufactures cheddar for Lion.
WCB says it will run the cut-and-wrap facility as a going concern, and intends to retain all staff.
Lion managing director Peter West says under its stewardship Coon, Mil Lel and Cracker Barrel have become family staples, and its everyday cheese business continues to perform well in the market.
“Our decision to sell is part of our broader three-year strategy to turn around performance at Lion Dairy and drive sustainable profit growth.
“We are focusing resources on our biggest growth opportunities, which are in higher-value categories such as milk based beverages, speciality cheese and yoghurt.
“Warrnambool Cheese and Butter is ideally placed – with the right assets, business profile and manufacturing footprint – to take over ownership of Australia’s leading everyday cheese business.”
Lion is happy that the agreement secures jobs at the Allansford cut-and-wrap site.
“This deal appropriately values the business and delivers a win/win for all stakeholders – including our people, the Allansford community, local farmers, customers and consumers. The proceeds of the sale will be invested in our turnaround strategy,” says West.
