as nzx fcg industry manufacturing retail foodservice founded 16 october 2001 2001 10 16 1 headquarters auckland new zealand products milk butter cheese ice cream revenue nz 17.2 billion 2015 16 2 operating income nz 266 million 2015 16 3 profit nz 834 million 2013 14 3 total assets nz 17.118 billion 2015 16 3 total equity nz 6.947 billion 2015 16 3 number of employees 22 000 3 subsidiaries anchor anmum anlene mainland cheese tip top slogan dairy for life . website fonterra.com fonterra co operative group limited f n t r is a new zealand multinational dairy co operative owned by around 10 500 new zealand farmers . 4 the company is responsible for approximately 30 % of the world s dairy exports 5 and with revenue exceeding nz 17.2 billion 6 is new zealand s largest company . the name fonterra comes from latin fons de terra meaning spring from the land . 7 contents 1 history 2 changes to capital structure 3 brands 3.1 global 3.2 new zealand 3.3 australia 4 business units and subsidiaries 5 environmental performance 5.1 initiatives 5.2 awards 5.3 biofuels 5.4 manawatu river waste water 5.5 deforestation allegations 5.6 lignite coal use protest 5.7 pollution prosecution 6 product issues 6.1 sanlu milk scandal 6.2 dcd contamination 6.3 alleged presence of botulism 7 see also 8 references 9 external links history edit te rapa dairy factory north of hamilton . in new zealand as in most western countries dairy co operatives have long been the main organisational structure in the industry . the first dairy co operative was established in otago in 1871 . by 1920 there were 600 dairy processing factories of which about 85 % were owned by co operatives . 8 in the 1930s there were around 500 co operatives 9 but after world war ii improved transportation processing technologies and energy systems led to a trend of consolidation where the co operatives merged and became larger and fewer in number . 10 by the late 1990s there were four co operatives the waikato based new zealand dairy group the taranaki based kiwi co operative dairies westland milk products and tatua co operative dairy company . 8 fonterra was formed in 2001 from the merger of the two largest co operatives new zealand dairy group and kiwi co operative dairies together with the new zealand dairy board which had been the marketing and export agent for all the co operatives . fonterra effectively has monopsony control of the new zealand domestic and export dairy industry . 11 the merger was initially turned down by the new zealand commerce commission but later approved by the new zealand government 12 with subsequent legislation deregulating the dairy industry allowing for the export of dairy products to be undertaken by any company . the two smaller co operatives tatua and westland did not join fonterra preferring to remain independent . the company has an annual turnover of around nz 17 billion . its core business consists of exporting dairy products under the nzmp brand 95 % of its new zealand production is exported . it also operates a fast moving consumer goods business for dairy products fonterra brands . fonterra has a number of subsidiaries and joint venture companies operating in markets around the world . fonterra riverina fresh in wagga wagga new south wales australia in 2005 the company purchased a large factory in dennington victoria australia from nestl after they moved out of the collection of milk from farmers and the manufacture of powdered milk in australia . 13 also in 2005 the company made moves towards purchasing australian companies dairy farmers and national foods . it also converted its 50 per cent stake in victoria dairy producer bonlac to full ownership . at this time 1 billion of fonterra s revenue was from australian sales which was 14 per cent of the dairy products it sells around the world . 14 in june 2008 the company acquired the yoghurt and dairy dessert business of nestl australia 13 which it on sold to parmalat australia in december 2015 . 15 in 2010 us embassy cables leaked by wikileaks suggested new zealand had only sent troops to iraq in 2003 following the initial invasion so fonterra would keep valuable oil for food contracts . 16 17 changes to capital structure edit this section needs to be updated . please update this article to reflect recent events or newly available information . february 2014 in november 2007 the board of directors announced 18 a two year consultation programme regarding their preferred capital re structuring option putting the business operations in a separate listed company with the co operative maintaining a controlling interest . the aim was to give more access to funds for global growth . praised by some 19 20 as a bold move which would allow better access to outside capital the proposals encountered significant opposition from both farmer shareholders and the government who would be required to pass enabling legislation . despite including a range of safeguards farmers were clearly concerned at the risk of losing control ; in what was sometimes described as a demutualization . the board responded in 2008 by shelving the november 2007 proposal and continuing consultation and discussion with farmer shareholders . in september 2009 the board announced a three step process to revamp fonterra s capital structure . 21 the new approach abandoned thoughts of a public listing of fonterra shares and retained 100 % farmer control and ownership of the co operative . a key goal of the capital structure changes was to stop large amounts of money washing in and out of fonterra s balance sheet each year as milk production fluctuates . 22 under the previous structure farmers matched their shareholding with their milk production by owning one co operative share for each kilogram of milksolids kgms produced annually . 23 if their milk production dropped in any season they could redeem shares back to the co operative which was required to buy the shares back off them . consequently fonterra faced the risk of losing large amounts of share capital through redemptions during times of declining milk production . 24 for instance after milk production fell during the 2007 08 drought fonterra had to pay out 742 million of share capital to farmers via redemptions . 25 the capital structure changes also sought to provide greater incentives for farmers to increase their investment in fonterra shares helping ensure fonterra has sufficient share capital to fund profitable business opportunities and drive a higher payout to dairy farmers . 26 the first two steps of capital structure change received good support from farmer shareholders at fonterra s annual meeting in november 2009 . 27 the first step allowed farmers to hold shares above their level of annual milk production ; farmers could now own an additional 20 % of dry shares i.e. up to a maximum of 1.2 shares per kgms . 28 there were also enhanced incentives for farmers to hold shares even if their production falls . the rules about the pricing of end of season share transactions were also tidied up . the second step changed the way fonterra shares were valued to reflect that share ownership is restricted to farmers only . previously fonterra shares were valued on a theoretical basis as if the shares were freely traded like a public share . 23 an independent valuer subsequently assessed that the restricted market value should be at a 25 % discount to the freely traded value . 29 the third step titled trading among farmers involves more far reaching change to fonterra s capital structure . the co operative would no longer be obliged to issue or redeem shares at a price established via an independent valuation process . instead farmers would buy or sell shares among themselves at market prices through a farmer only share trading market . this would have the effect of making fonterra shares permanent capital providing the co operative with more confidence to invest in long term projects without fear that some of its share capital might be needed to fund redemptions in future years . 30 as part of the changes farmers would have greater flexibility with their fonterra shareholding . the maximum shareholding would be 2 times production up from the 1.2 times approved in step one and farmers would have up to three years to comply with shareholding rules when entering exiting the co operative or increasing decreasing their milk production . 24 additionally fonterra would set up a special fund that would financially help farmers purchase shares or retain shares they would otherwise have to sell . the fund would pay farmers for the right to receive dividends and the gain loss from any changes in value of some of their shares but the farmer would still be the owner of the shares . 24 the fund would raise the money it needed to pay farmer shareholders by selling investment units to investors . 31 fonterra would require the fund to target friendly investors such as sharemilkers retired farmers and offshore fonterra suppliers although the public and institutions would also be able to participate . 31 the trading among farmers proposal went before a special meeting on 30 june 2010 and received 89 % support from farmer shareholders voting easily exceeding the 75 % threshold required for a favourable vote . 32 brands edit fonterra milk powder factory in heerenveen the netherlands . global edit anchor milk tip top icecream anlene anmum mainland cheese butter new zealand edit anchor milk anchor calciyum flavoured milk custard yoghurt ice cream anchor greek yoghurt anchor uno kid s yoghurt anmum country goodness butter margarine blend spread cultured sour cream dips de winkel yoghurt fresh n fruity yoghurt galaxy specialty cheese kapiti ice cream specialty cheese mainland cheese butter mammoth supply co. flavoured milk perfect italiano italian cheese primo flavoured milk symbio probalance probiotic yoghurt tip top ice cream australia edit bega cheese 33 anchor calciyum anchor milk and cream mainland cheese & butter mammoth energy munchables perfect italiano western star butter 34 business units and subsidiaries edit fonterra brands consumer goods business nzmp ingredients global ingredients business fonterra global dairy trade dairy ingredients supplier to the globally traded market anchor food professionals fonterra foodservices supplies fonterra group manufacturing fonterra s food processing and manufacturing operations fonterra milk supply collection and distribution of milk from farms shared services finance communications m & d human resources strategy and information services . rd1 a wholly owned rural retail supplier . rd1 was formed at the end of 2001 through the merger of rd1.com and the town & country agri centres fonterra s two rural supply companies . with revenue exceeding 900 million rd1 is new zealand s largest retailer of agricultural supplies to dairy farmers . it operates in over 60 stores throughout new zealand . in 2014 farm source was launched as a new brand platform for rd 1 which provided additional benefits including farm source rewards and exclusive prices for fonterra farmer suppliers . environmental performance edit initiatives edit dairying stock entering waterways due to lack of fencing and poor use of fertilisers are major contributors to water pollution in new zealand . 35 fonterra s environmental policy states that fonterra shall demonstrate a global commitment to protecting the environment . sustainability good environmental practice and environmental improvement are cornerstones of fonterra s environmental commitment . 36 fonterra claims to have a number of initiatives such as the dairying and clean streams accord relating to environmental protection to achieve this policy . in december 2011 the green party questioned fonterra s credibility and the effectiveness of the self auditing approach given the wide discrepancy between fonterra s claims and an independent audit of dairying and clean streams accord . 37 in 2003 fonterra became a signatory to the dairying and clean streams accord which