39 Facts About Fonterra


Fonterra was established in October 2001 following the merger of the country's two largest dairy co-operatives, New Zealand Dairy Group and Kiwi Cooperative Dairies, with the New Zealand Dairy Board.

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Fonterra was formed in 2001 from the merger of the two largest co-operatives, New Zealand Dairy Group and Kiwi Co-operative Dairies, together with the New Zealand Dairy Board, which had been the marketing and export agent for all the co-operatives.

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Fonterra effectively has monopsony control of the New Zealand domestic and export dairy industry.

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Fonterra has a number of subsidiaries and joint-venture companies operating in markets around the world.

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In late February 2022, Fonterra suspended exports to Russia in protest of the 2022 Russian invasion of Ukraine.

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Fonterra had exported NZ$240 million worth of produce to Russia in 2021.

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Fonterra is the current chairperson and in March 2020, he foreshadowed that he would step down in November 2020.

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Consequently, Fonterra faced the risk of losing large amounts of share capital through redemptions during times of declining milk production.

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Capital structure changes sought to provide greater incentives for farmers to increase their investment in Fonterra shares, helping ensure Fonterra has sufficient share capital to fund profitable business opportunities and drive a higher payout to dairy farmers.

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Second step changed the way Fonterra shares were valued to reflect that share ownership is restricted to farmers only.

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Previously, Fonterra shares were valued on a theoretical basis as if the shares were freely traded like a public share.

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Additionally, Fonterra would set up a special fund that would financially help farmers purchase shares .

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Fonterra would require the fund to target "friendly" investors such as sharemilkers, retired farmers and offshore Fonterra suppliers, although the public and institutions would be able to participate.

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Fonterra marketed and distributed the Bega Cheese brand, under an agreement established between the two companies in 1999.

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Fonterra later raised the issue of Bega otherwise using the Bega brand to market peanut butter.

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In 2003, Fonterra became a signatory to the Dairying and Clean Streams Accord, which sets a timeframe for the improvement of water quality on farms.

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The 2012 independent audit spurred further progress in this area with Fonterra announcing that suppliers will be required to complete fencing of Accord waterways by June 2013.

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Fonterra is a Corporate Sponsor of the Society and each year teams of staff from the company's manufacturing sites participate in the Keep New Zealand Beautiful Clean Up Week campaign, clearing rubbish from around roadsides, sports fields, parks and beaches.

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In 2007, Fonterra won two awards in the Energy Efficiency and Conservation Authority, Energywise Awards:.

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In 2008, Fonterra Edendale won the New Zealand Clean Air Society's annual Clean Air award, which recognises exceptional contributions by individuals and businesses to researching and improving the environment.

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In 2009, Fonterra won the supreme prize at the Packaging Council of New Zealand's Environmental Packaging Awards for its introduction and promotion of a more environmentally sustainable packaging.

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In 2012 Fonterra won the Export Category at the 2012 TVNZ New Zealand Marketing Awards for their Anchor Strong marketing to the Pacific, with designs by Dow Design.

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Fonterra is New Zealand's largest producer of biofuel, processing a waste stream from casein manufacture into bio-ethanol.

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Fonterra produces around 20 million litres of premium ethanol annually.

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Since 2004, Fonterra has produced ethanol from whey, a by-product of casein, in the Edgecumbe, Tirau and Reporoa plants.

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In 2008, Fonterra began supplying Gull Petroleum with ethanol from its Edgecumbe plant.

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In July 2016, Fonterra announced that their tanker fleet was switching to ZBioD as a foundation customer.

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Fonterra responded to Forest and Bird's request, agreeing to treat wastewater it discharges into the Manawatu River, greatly reducing its impact on the river.

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In 2010, Fonterra signed a voluntary agreement with local councils and freezing works to clean up the river.

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Fonterra has since encouraged its farmers to clean up their waste and plant trees alongside waterways.

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Fonterra says it shares community concern about tropical deforestation, "which in some cases has been driven by the establishment of palm oil plantations".

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Fonterra was the subject of Greenpeace Aotearoa New Zealand protests off the Port of Tauranga on 16 September 2009 and Port Taranaki on 5 February 2011, where Greenpeace activists invaded ships carrying palm kernel animal feed, destined for dairy farms.

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In September 2010, Bay of Plenty Regional Council made a statement that it had prosecuted Fonterra for allowing nitric acid and a caustic cleaning agent from its Edgecumbe milk processing plant to spill into a storm water drain and into a water course.

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Fonterra is currently educating its sites on the best way to reduce pollution.

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Fonterra first became aware of problems on 2 August 2008, when the Sanlu board, which had three Fonterra directors, was advised there was a problem with the contamination of infant formula.

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Ferrier denied Fonterra knew that Sanlu lied for eight months to hide complaints about its baby formula causing illness.

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Fonterra added the company did not come forward with the information earlier because it was waiting for the recall process to move through the Chinese system.

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David Oliver, a New Zealander who works as a corporate advisor to companies in the Chinese agricultural industry, feels that while Fonterra had board representation in Sanlu, it is unlikely they had much influence within the company as they had only a minority stake.

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Fonterra has received praise for its handling of the DCD issue.

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