Fonterra to settle class action

Fonterra said it will pay A$25 million (NZ$27m) to settle a class action against it by Australian dairy farmers over its milk payment cuts in 2016. The settlement, which is made without any admission of liability, is subject to court approval, the co-operative said in a statement to the NZX. The payment was provided for in last year’s financial statements and would not have a material impact on the company’s financial position, it said. The case stems back to the 2015/16 dairy season when Fonterra lowered its payment to its Australian suppliers towards the end of the season, after a drop in global milk prices. In May 2016, Fonterra announced it would reduce its milk payment for the 2015/16 season to A$5 per kilogram of milk solids, from its opening price at the start of the season of A$5.60 per kgMS. To make an average payout price of A$5 per kgMS for the season, the company reduced its payout to A$1.91 per kgMS for the last two months.