Fonterra to acquire assets of Tamar Valley Dairy

Fonterra, a New Zealand-based multinational dairy co-operative, is set to acquire the assets of Tamar Valley Dairy, a Tasmanian yoghurt producer that entered administration in August.

By the end of November, Fonterra will acquire the processing equipment, intellectual property and trademark names of Tamar Valley, which supplies branded products to Coles as well as house brands to Aldi supermarkets.

The latest deal comes around a week after the company bought a 6% stake in Australian dairy company Bega Cheese.

Fonterra Australia managing director Judith Swales said, "Acquiring the Tamar Valley Dairy yoghurt business is an important step in strengthening Fonterra’s strong national position in the chilled dairy segment in Australia, and complements our existing yoghurt portfolio, where we hold a market-leading position in mainstream yoghurt through the Nestlé SKI brand."

"In reaching today’s agreement, the parties have worked closely to move the business forward, while addressing two key considerations – that the business remains in Tasmania, which Fonterra is committed to, and that as many Tamar Valley Dairy employees as possible remain employed," Swales added.

In addition, the company plans to invest in improving its manufacturing assets and build capability for further innovation in the yoghurt category.

The Tamar Valley Dairy site will be integrated into Fonterra’s Spreyton and Wynyard manufacturing units, which process over half of the state’s milk.

Fonterra collects almost 500 million litres of milk from almost 260 dairy farms each year, and employs 220 people.

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Image: Fonterra will strengthen its position in the Australian dairy industry with this latest deal. Photo courtesy of Fonterra Co-operative Group.