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Fonterra Suppliers Expect Better Bottom Line

5 December 2003
PR 252/2003

Fonterra Suppliers Expect Better Bottom Line

Dairy farmers expect that Fonterra's decision to transfer its consumer products business to Auckland will cut costs and improve its bottom line, said Kevin Wooding, Chairman of Dairy Farmers of New Zealand (DFNZ).

"Looking back on Fonterra's formation it was clear that duplication costs would be taken out at some stage. So farmers must expect these types of changes which must improve efficiency," he said.

"The most important thing is that it boosts the bottom line, which should mean a higher payout for dairy farmers struggling in the current difficult trading environment," he said.

Fonterra's current forecast payout for the 2003/04 season is $3.95, compared to $5.30 in the 2001/2 season.

"Because of the tough environment due to a high New Zealand dollar, farmers will be happy that duplication costs are being removed," he said.

DFNZ appreciates the work of people at New Zealand Milk who have decided to not stay after the move from Wellington.

However dairy farmers will be alarmed if the reorganisation and consequent staff changes harm or hold back development of dairy-based consumer and food-branded products at New Zealand Milk.

"The development of leading brands such as Anchor, Chesdale and Mainland must not be put at risk by these changes," Mr Wooding said. "We don't want to lose good people."

DFNZ is an industry group of Federated Farmers of New Zealand (Inc), New Zealand's rural organisation with more than 18,000 members.


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