When Fonterra bought Bonlac in 2003, the NZ giant agreed to benchmark its farmgate price against its rival, the Murray Goulburn Co-operative.
But suppliers contacted by The Weekly Times said Fonterra was justifying its decision on the fact it had made an “additional payment” of 40c/kgMS to suppliers last year, which matched MG’s final $6 price.
“Fonterra originally told us the 40c was not part of our milk payments,” one leading Fonterra said. “Loyal suppliers had to use the 40c to pay back our Fonterra Australia Support Loans.”
It appears new suppliers, unencumbered with the 2016 milk price clawback debt, gained a clear advantage over existing suppliers.
In a complex letter sent to Fonterra suppliers last Friday the Bonlac Supply Company stated: “We understand some of our farmers are of the view the 40c/kgMS payment should have been paid”, but concluded Fonterra was not required to make any additional payments.