Fonterra sells Australian ice cream business

Filed by Geoff Platt

© Nestlé

Nestlé will acquire the Peters brand in Western Australia, and the Connoisseur ice cream brand, while Bulla will acquire the licence to manufacture and market the Cadbury ice cream range in Australia. Both agreements are conditional upon regulatory approval.

The Nestlé arrangements will see Nestlé integrate the production of the Peters and Connoisseur brands into its national ice cream business, with all manufacturing consolidated in its Mulgrave facility in Victoria.

Fonterra Australia New Zealand MD, John Doumani, said the decision makes good business sense: “Given Nestlé owns the Peters brand in all states except Western Australia, they’re the logical owners of the brand in Western Australia, and the decision to sell the Peters brand to Nestlé ensures Peters remains a strong, vital brand in Western Australia.

“Nestlé has the required scale, synergies and expertise to invest in the Peters and Connoisseur brands to continue to position them as strong leadership brands in the ice cream category.”

Bulla’s capability and expertise in ice cream will ensure the continued innovation and growth of Cadbury’s popular ice cream range in Australia. Initially, Fonterra’s Balcatta site in Western Australia will continue to produce this range, with Bulla eventually taking production to its Victoria factory. As a result of the sale, up to 140 jobs will be lost.

Fonterra’s New Zealand ice cream business, Tip Top, and its remaining West Australian dairy business are unaffected.

Doumani has assured Fonterra’s Western Australian farmer suppliers that the announcement has no impact on their milk supply arrangements. “We collect over 130 million litres of milk in Western Australia annually, and our growing Brownes brand portfolio will continue to require this secure supply of fresh, high-quality milk to produce its market-leading, innovative products.”

Source: Fonterra