Gross profit in Fonterra’s Australian business fell 9% from NZ$294m to NZ$269m, largely reflecting a one-off expense of NZ$27m related to a class action settlement related to the 2016 milk price clawback.

Consumer sales increased 10% YOY, while gross profit for the foodservice channel was stable. Margins in the ingredients division were adverselt affected by the disconnect between global commodity prices and local milk price. Fonterra forecast a slight increase in its milk intake to 1.4b litres.

Fonterra Australia Suppliers Council chair Paul Weller said the results were a good basis to start pushing for step ups, with the next bi-monthly price review due at the end of October.