Bega and Fonterra in court

By Geoff Adams

Dec 6, 2024

An example of one of the products produced co-operatively between Fonterra and Bega.

Fonterra is taking Bega to court to clarify the status of its Australian licensing arrangements preliminary to a sale of Fonterra Oceania assets.

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Fonterra announced in May it was selling its Australian businesses.

Fonterra packs Bega-branded products, including a new range of snacking products, which pairs Bega cheese with crackers.

Bega announced the court proceedings in the Supreme Court of NSW, by saying that Fonterra was seeking declarations from the court that transactions proposed did not affect the operation of the trademark licence arrangements between Bega and Fonterra.

“Fonterra is not seeking damages,” Bega said.

“Fonterra is not seeking to alter the current contractual or operational arrangements between the parties.”

Fonterra said as part of its preparatory work for the sale of Fonterra Oceania assets and following some speculation regarding the operation of certain provisions in Fonterra’s arrangements with Bega, Fonterra was seeking a court determination to confirm the co-operative’s clear understanding that the provisions of its licenscing agreement with Bega are not impacted by a sale process.

“Fonterra is confident in its legal position and does not expect this matter to disrupt its timeline for any divestment,” a statement from the company said.

Fonterra CEO Miles Hurrell said in November, the co-op had decided to proceed with a sale process for the Fonterra Oceania and Fonterra Sri Lanka.

“Since our announcement in May 2024, we have been working with our team of advisors to assess potential divestment options, the assets and businesses in scope, and the best pathway to maximise value for our co-op,” Mr Hurrell said.

“This work, coupled with the confidence we have in our revised strategic direction, has confirmed a divestment of our global consumer and associated businesses is in the best interests of the co-op.

“Our revised strategy will see us prioritise our ingredients and foodservice businesses, creating a more focused and higher performing co-op.

“We have received meaningful buyer interest in the businesses in scope for divestment, which is testament to their strength and potential.

“A final decision on which divestment pathway to pursue will be based on several factors, including which option will result in optimal long-term value for the co-op.”