Fonterra settles clawback class action for $25 million

Fonterra announced on Friday it had reached an agreement to settle the class action.

Lawyer for the farmers David Burstyner said about 350 farmers were already registered but the money would go to whoever came forward.

"It is a good settlement for farmers, and they will get a good return for it if they come forward," he said.

"The court will figure out a process for that."

Fonterra agreed to the settlement, without any admission of liability.

The case was listed for a hearing in the Supreme Court on Friday, where the settlement was expected to be approved.

The class action alleged Fonterra breached its contractual obligations with a retrospective step down in May 2016 by slashing the milk payments expected.

READ MORE: Farmers called to join action against Fonterra

The clawback caused a severe cash-flow crisis, and farmers in the class action alleged Fonterra engaged in misleading and deceptive conduct, acted unconscionably and breached farmer contracts.

Fonterra Australia managing director René Dedoncker said the company had settled the class action because it believed it was in the best interests of farmers, the dairy industry and its business.

"Over the last six years we have invested a significant amount of time and effort to overhaul our relationship with farmers to rebuild trust and strengthen the dairy industry," he said.

"We are proud of the good relationships we have today with our farmers and the wider industry and are committed to investing in the future of Australian dairy for years to come."

READ MORE: Fonterra abandons plans to sell Australian operation, upbeat about future as milk supply stabilises

Mr Dedoncker said the settlement sum of $25 million, inclusive of interest and all costs, had already been provided for in the prior years financial statements and would not have a material impact on Fonterra Co-operative Group Limiteds financial position.

In October, the Supreme Court ordered the parties in the case to attend mediation.

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