The move comes during a turbulent time for Australia’s dairy industry. Victorian farmers have already been faced with prices – which in some cases – are below the cost of production. 

The Wagga business is behind the successful, and well-known label Riverina Fresh.

In a statement issued by Fonterra it was cited that the sale of the Wagga manufacturing plant – and the Riverina Fresh Brand – would allow the company to to concentrate on other areas of its business.

THE STATEMENT READS: Completion of the transaction is subject to a number of conditions being satisfied but the parties expect to complete the sale during October 2016.

All Fonterra’s employees in the Wagga business have received offers of employment from Blue River Group.

Fonterra Australia Managing Director René Dedoncker said the Wagga  business is a strong business with an award winning brand in Riverina Fresh which is favoured by baristas, but it is not core to our strategy of Ingredients, Consumer and Foodservice.

“Divesting the Wagga business follows the divestment of non-core assets, including our yoghurt and dairy desserts business, our Bega shares and our stake in Dairy Technical Services, and allows us to focus and put all our energy into our core businesses of Ingredients, Consumer and Foodservice,” said Mr Dedoncker.

“Our Australian operations have particular Ingredients strengths in cheese, whey and nutritionals, complemented by our consumer and food service businesses. These businesses and dairy foods are matched by our manufacturing footprint in Victoria and Tasmania. “In the last 12 months, we’ve commissioned a multi-million beverages plant in Cobden, creating over 50 local jobs; secured new long-term customers for our nutritionals plant in Darnum including Bellamy’s Organics as well as entering into a joint venture agreement with Beingmate; and and we’re building a new state-of-the-art cheese plant in Stanhope which is on track for completion mid-2017.

“We’re investing in programs and innovations to support our market-leading cheese and spread brands – Western Star, Perfect Italiano, Mainland and Bega - we’re building on the early success of our newly launched Anchor brand in Australia, and we’re maintaining the excellent performance of our Foodservice business.

“All these initiatives have laid the foundation for a strong sustainable business that is profitable for the long-term and well-positioned to pay our farmers the best possible milk price in a competitive global market,” said Mr Dedoncker. Supplying farmer relationships will be maintained by Blue River Group.