The Herald had an article this morning about selling off the value-add businesses. The people that bought Tip Top have increased turnover and profitability significantly in the first year and I think they said Tip Top is also exporting more ice cream.
The real argument for the sell offs is that Fonterra mgmt and staff aren't very good at running these types of value-add businesses. I guess as long as the buyers of the businesses don't use transfer pricing to make the profits in a tax haven, NZ inc might be better off.
That said I recall an article just the other day where 3M NZ found an error that raised their NZ support services costs from $41k to $21mill. Whoopsie that was a bit of a blunder.
https://businessdesk.co.nz/article/l...penses-blooper
Sorry a Business Desk article from the herald even I cannot access online.
The sale of the power transmission network in Wellington also springs to mind, Chalkies article years ago was very enlightening. I learnt about thin capitalisation and transfer pricing and how it is not good for NZ.
mike2020 might have better information and a different view, probably has a better mind than me as well. Farmers are very sensitive about these things. I called a table of farmers a bunch of country bumpkins the other day and they got very upset and defensive. I guess they did not appreciate their table probably held more wealth and generated more export earnings than all the other tables combined at the pub, not sure why they worry about how smart they are, let the results speak for themselves.
They perhaps could be questioning the intelligence of top mgmt at Fonterra. They pay top dollar for them, shame they can't work out how to run their value add businesses. That said I think Miles has been doing a lot better than any of his recent predecessors, although that is based on vague memories of distant newspaper articles.