Lactalis Emerges as Leading Candidate to Acquire Fonterra’s Australian Consumer Brands

French dairy giant Lactalis has become the frontrunner to acquire the Australian consumer and food products division of New Zealand cooperative Fonterra, which includes the Mainland cheese brand. The package also covers Perfect Italiano, Western Star (butter), and the license for Bega Cheese products in Australia.

The sale is part of Fonterra’s broader strategy to divest its consumer products segment and focus on its core business — industrial ingredients (B2B).

Lactalis, which already owns well-known Australian brands such as Pauls and Vaalia, was granted exclusive negotiation rights after competing against groups like Meiji (Japan) and Bega Group in partnership with FrieslandCampina (Netherlands). While Fonterra had hoped for a valuation of up to USD 4 billion, analysts expect the final price to be lower.

The Australian Competition and Consumer Commission (ACCC) approved the deal, noting that overlaps in the raw milk market are limited and that in the finished products segment, the companies focused on different categories (Fonterra – cheese, Lactalis – milk and yogurt).

If completed, the acquisition will strengthen Lactalis’ position in Australia, while for Fonterra it will mark a significant strategic shift. The transaction is a notable example of how major global players are reshaping the international dairy market, with a substantial impact on producers, processors, and consumers alike.

(Photo: Lactalis Group)