New Zealanders have questions about the Lactalis deal

Now that the members of Fonterra have agreed to the sale of the so-called Mainland Group to Lactalis, the discussion in New Zealand should be concluded on the matter. However, this is not the case. Causes include the significant importance of Fonterra to the New Zealand economy and the uncertainty about what has actually been sold and given away. Regarding the sale, it has been reported that Fonterra has sold its consumer products plus several brands (three larger ones, including Mainland, and multiple smaller ones) to Lactalis, but it is actually about much more. All activities in Australia and Sri Lanka have also been sold to the French dairy giant. This also includes sixteen to eighteen locations, including three in New Zealand itself. Cheaper staffWhat this could mean for Fonterra and the New Zealand economy is something that some started to realize only when they read a plan from Lactalis that this company wants to transfer 4,300 employees in New Zealand to the workforce of Lactalis Australia. Lactalis already had its own division there. The fear now is that Lactalis wants to have the relatively expensive New Zealand staff managed from Australia and eventually wants to replace them with much cheaper Australian staff (who may also come from elsewhere). The complete picture of the deal is not known because the parties have not provided full transparency. Regarding valuationAnother concern is that Fonterra may have cut off its own fingers by selling a number of its so-called less profitable companies in New Zealand to the French because now it can provide less care for a surrounding valuation of its product, and has become dependent on Lactalis. The long-term supply contracts for milk to Lactalis also do not help in this regard. The own control over the milk has disappeared, it is said. Clouded viewIt is not only politicians who oppose the deal with Lactalis; more or less ordinary New Zealanders and dairy experts are also critical. According to them, the Fonterra members have allowed their view to be clouded by a one-time super bonus. The sale of the Mainland Group brings in NZ $4.2 billion, of which the members receive $2 per share (€0.98) tax-free. The average Fonterra member owns about 150,000 shares. Reliability of Lactalis There are concerns not only about whether the management of Fonterra and the members following their lead have made a thoughtful decision. Doubts are also expressed in various comments about the reliability of the French. Lactalis has a long history of fines for legal violations in Italy, in Spain, in France itself, and also in Australia. Will Lactalis uphold its commitments to the New Zealanders?