Peter MacDonald
NZ First leader Winston Peters has expressed disapproval of Fonterra’s proposed sale of its iconic dairy brands to the French company Lactalis. While his opposition is largely symbolic, he has no power to prevent the deal. Peters concerns are likely from his understanding of the co-op dairy legacy, now long gone and about to be further hollowed out by this looming sale.
The cooperative legacy that once built New Zealand’s dairy system, local ownership, ethical stewardship and practical infrastructure has been hollowed out, leaving only the skeletal framework that the modern for profit system cannot genuinely replace.
In the 1860s and 1870s, Dunedin was more than New Zealand’s largest city, it was a hub of civic ambition, ethical leadership and practical innovation. Scottish Presbyterian settlers, civic leaders, and enterprising farmers asked a bold question: could New Zealand build a system that made the nation wealthy, fed its people, and benefitted everyone, not just a few...
Key figures like Superintendent of Otago Province James Macandrew and William Larnach, banker and merchant, were guided by church elders who emphasised fairness, stewardship and the public good. They discussed infrastructure, shipping, and trade always through the lens of community benefit. Their goal was clear – the wealth generated by New Zealand’s farms should stay local, support rural communities and provide affordable, healthy food for all.
They took inspiration from Europe. The Dutch, with a long history of farmer-owned co-operatives, shared knowledge through letters, printed bulletins, study tours and exhibitions. Dunedin’s leaders adapted this expertise to local conditions and built co-op dairy factories near farms, using strict quality standards, and profits were shared among producers.
The result was a system where farmers retained ownership, profits stayed local, and ordinary New Zealanders had access to affordable dairy. Government, taxpayer-owned, subsidised rail and port infrastructure supported the public good while exports generated GDP. Ethical for public good principles and practical enterprise worked hand in hand.
That system endured for a century, until 1984. Rogernomics began a sustained shift toward privatisation. Today, Fonterra is selling parts of its business, including butter and cheese production, to the French dairy giant Lactalis. Control and profit are moving overseas and global investors now dominate the system. Farmers produce the goods, consumers buy them and infrastructure enables exports, yet the majority of profits flow to distant investors, leaving local producers and communities with only a fraction of the value they create. The result is not only diminished local control but also continuing higher prices in supermarkets for ordinary New Zealanders.
Lactalis, like Fonterra, is ultimately controlled by BlackRock, which holds controlling stakes in many of the world’s largest trading and logistics companies. Profits from dairy, just one small division of a vast global financial portfolio, are redirected primarily to investors, rather than supporting local farmers, communities, or infrastructure. BlackRock and similar global investors take no responsibility for production or local systems, yet extract enormous returns through financial manipulation, contracts and supply chain control. The wealth created by local labour and local investment funnels upward, leaving ordinary producers and communities disadvantaged, while the global elite accumulate vast returns at zero operational cost. They achieve this by owning just enough stock to control every publicly listed company in the world, steering global trade and profits directly to themselves like a giant gold dredge on the Clutha River – skimming every fleck of gold for themselves.
The contrast is clear. Early Dunedin leaders built a cooperative system based on ethical conviction and community ownership. Today, the system prioritises distant investors over local producers and citizens. What was once a public good model has been irreversibly hollowed out and transformed into a profit-driven machine.
The current Fonterra controversy is a warning: New Zealand’s wealth and food security were built by leaders committed to the public good, not by global investors indifferent to local needs. The sale of Fonterra’s butter and cheese shifts control overseas, eroding a system that once supported farmers and all New Zealanders. If we lose this model entirely, the public good system that made New Zealand strong, prosperous, and fair will be further dismantled.
New Zealand has lost control of the framework originally established by Dunedin’s ethically minded leaders. The structure they built still exists, but it has been covered in a new cladding – one that prioritises profit over the public good and no longer protects New Zealanders from the pressures and inequities the system was designed to prevent.
The systems set up by Dunedin’s leaders laid the foundation for New Zealand’s first exports of meat and dairy to Britain. The first frozen meat export from Dunedin was the SS Dunedin, which departed from Port Chalmers on February 15, 1882, carrying a cargo of frozen sheep and lamb carcasses. The successful voyage to London, where the meat sold for more than double its New Zealand price, paved the way for New Zealand’s massive frozen meat export industry. From Dunedin, this initiative secured the nation’s great wealth accumulation and prosperity.
Through farmer owned co-operatives, strategic infrastructure and ethical governance, ordinary New Zealanders benefitted and the nation’s economy flourished. This public good system sustained prosperity until 1984, when Rogernomics and City of London profit-driven policies took hold, dismantling locally controlled structures and redirecting wealth upward to distant investors.
