Mr Kane was responding to yesterday’s shareholder vote which saw farmer shareholders overwhelmingly vote in favour of the sale of household brands such as Mainland and Anchor to French dairy giant Lactalis.
While the threshold required to approve the sale was more than 50%, 88% of the votes cast backed the $4.22billion sale.
Fonterra is targeting a tax-free capital return of $2 per share to shareholders and unit holders, equivalent to $3.2b, once the sale is complete.
ASB Bank estimated the sale proceeds would be worth about $4.5b to the economy, with farmer shareholders receiving an average tax-free payout of about $392,000 if the sale went ahead.
New Zealand First leader Winston Peters, who has been openly critical of the sale, described it as “utter madness” and “economic self-sabotage”.
“This is an outrageous, short-sighted sugar hit that is just giving away New Zealand’s added value,” Mr Peters said on X.
But Mr Kane, a West Otago dairy farmer who is a Fonterra shareholder but not a supplier, said it was a publicly listed company and a co-operative.
If shareholders wanted to vote to divest the Mainland Group businesses, then that was “their prerogative” and a mid-size family farming business was unlikely to turn away $500,000 cash.
It would be interesting to see how the additional money in farmers’ pockets played out — potentially land prices could continue to skyrocket.
If he was a lowland sheep farmer sitting on 130ha of land he could sell for succession reasons, and did not want to sell for forestry, then there was potentially a good opportunity to sell.
“To me, it opens a hell of a lot of exits.”
He could see both sides of the argument regarding brands.
There was a great story to be told in a company owning its own brands, and he understood Mr Peters’ concerns, but the reality was if it was so good for the economy, the government could have stepped in and bought it.
Clydevale sharemilker Marcus Frost, who is chairman of Otago Federated Farmers dairy section, said the returns to shareholders would be a good thing for local economies.
Some might look to buy more land, pay off debt or invest off-farm.
“If you look at the numbers that are there, you’d be silly not to sell it [Mainland], to be fair,” Mr Frost said.
As a sharemilker, he did not own any shares, so did not benefit from the windfall.
Fonterra chairman Peter McBride said the decision to divest the Mainland Group businesses was significant and one the board did not take lightly.
“We have examined the strategic context we operate in, our strengths and how as a co-op we create value for our farmer owners.
“The divestment will usher in an exciting new phase for the co-op.
“We will be able to focus Fonterra’s energy and efforts on where we do our best work.
“We will have a simplified and more focused business, the value of which cannot be overstated.”
Completion of the divestment remained subject to securing certain regulatory approvals and the separation of Mainland group business from Fonterra, both of which were well under way.
Subject to those steps being completed, Fonterra expected the transaction to complete in the first half of the 2026 calendar year.
Another shareholder vote would be required for the payment of the capital return and Fonterra planned to provide more detail on the timing and process in early December. — Additional reporting RNZ
