Wednesday, 24 September 2025 12:25

Drop the Anchor!

Written by The Hound

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OPINION: A few armchair experts have dumped on Fonterra’s $4.22b sale of its consumer business, but the more your old mate reads about it, the more it seems like a smart move.

Kiwis feel a surge of pride when they see the old Anchor brand when they’re overseas, but national pride isn’t exactly the last word in financial analysis.

A better yardstick is the opinion of the likes of Forsyth Barr senior analyst Matt Montgomerie and analyst Ben Crozier, who refer to the assets sold as “the poor-performing Mainland Group”.

They view Fonterra as a “much higher-quality business” without it. The Consumer business has long been a problem area for Fonterra and its return on capital is typically abysmal compared with the co-op’s Foodservice and Ingredients arms.

Fonterra’s core strength is clearly milk processing—not branded consumer products.

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