Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
The co-op purchased its shareholding in 2013, amid a takeover battle for Australian processor Warrnambool Cheese and Butter; Bega unsuccessfully bid for WCB.
Fonterra chief financial officer Lukas Paravicini says they are focused on investing in higher value add dairy products that deliver the best returns for shareholders.
Releasing capital, such as through this sale, for future growth is the best use of our shareholders' funds, he says.
The sale of Fonterra's shareholding has no implications for its long-standing relationship with Bega, which includes a license on the Bega brand and a supply contract for cheese.
"The Bega brand has an important role in our cheese portfolio where we are a market leader, and we will continue to build on our relationship with Bega which goes back more than a decade," says Paravacini.
