New Zealand First leader Winston Peters has hit out at the past management of dairy giant Fonterra, after the sale of Tip Top to an overseas buyer.
Fonterra has sold the iconic icecream company to UK-based Froneri, owned by Nestle and R&R Ice Cream, for $380 million.
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Fonterra is looking to slash debt by $800 million, and turn its performance around after posting a net loss of $196 million for the July year.
The New Zealand First leader told Magic Talk's Peter Williams that the sale was the result of bad management in the past.
"Here we have an icon company where we take milk and add value to it, and this is a company that Fonterra bought back from off-shore ownership in 2001, but in later years there has been some serious mismanagement of Fonterra," he said.
He singled out the investment in China's Beingmate as an example of bad commercial decisions.
"There were massive losses, when you look at the actual loss and opportunity cost it's probably 1.4 billion dollars."
He blamed the situation which led to the sale of Tip Top on the shoulders of previous Fonterra management.
"It's been poorly managed and now it's gone ahead at a critical time, when we need to be looking at added value to all our milk products, and they've sold it into foreign ownership," he said.
"They made some shocking decisions."
Peters maintained that the structure of Fonterra was sound.
"The structure was fine, but not when you make silly commercial decisions whilst earning eight or nine million dollars, just for one person - it was outrageous."
Under the deal, Fonterra will continue to supply the milk used in the icecream, and will retain ownership of the Kāpiti brand.
In announcing the sale, new Fonterra CEO Miles Hurrell said one of the big attractions in selling to Froneri was that Tip Top and Kāpiti icecream both use fresh milk and cream, from New Zealand grass-fed cows.
"We've signed an agreement with the new owners to supply milk which ensures that Fonterra farmers will continue to be part of the Tip Top story," he said.
Under the sale, production will stay at TipTop's factory in Mt Wellington, Auckland, and the current management team will stay on.