95bFM Dairy giant Fonterra sued for misleading labels on butter
16 April, 2026
Interview by Liam Ivanov-Fesien, adapted by Samantha Watson-Tayler
New Zealand dairy giant Fonterra has been sued by Greenpeace for misleading consumers. The organisation had labelled its Anchor butter as “100% New Zealand grass fed”, while feeding the cows palm kernels from Southeast Asia. Fonterra has admitted to lying on the packaging and therefore violating the Fair Trade Act of 1986.
Sinéad Deighton-O’Flynn, agricultural campaigner at Greenpeace Aotearoa, spoke to 95bFM’s The Wire about what this lawsuit and associated admission means for the New Zealand dairy industry.
Despite Fonterra’s claims of having “100% grass fed” cows, the cows eat up to 3 kilograms of palm kernels, which O’Flynn describes as “a dry, gravelly cow feed that comes from the destroyed rainforests of Southeast Asia.”
“It is certainly not grass.”
She adds that the palm oil industry has been linked to deforestation, illegal operating practices, destroying animal habitats, and human rights abuses. As the #1 importer of palm kernels internationally, New Zealand is supporting the industry to continue operating. According to O’Flynn, the average farm’s ratio of palm kernels to grass is “about 20 percent on a dry matter basis”.
In 2017 Fonterra implemented the “Fat Evaluation Index” limiting palm kernel feed to 3 kilograms. The policy came as a response to reports that consumers could recognise the difference between butter from 100% grass fed cows, compared to the lower quality butter from palm kernel fed cows.
In 2023, a complaint was made to the Commerce Commission about the misleading nature of the “100% grass fed” packaging. The Commission notified Fonterra about the issue, but no change was made, leading Greenpeace to take the organisation to court in 2024. O'Flynn believes that Fonterra knowingly used misleading packaging to maintain sales.
“They know that New Zealanders really care about the environment and would be really horrified to think that the butter they're spreading on their toast is contributing to rainforest destruction”.
O'Flynn says public attitudes towards the environment incentivise companies towards greenwashing. Corporations like Fonterra promote environmental labels or policies for marketing, but fail to live up to those values in their business practices. While Fonterra has updated their packaging to remove the “100%”, it still makes no mention of the palm kernels.
With Fonterra CEO Miles Harrell announcing his resignation earlier this year, O’Flynn is urging whoever replaces him to phase out palm kernels entirely. She continued that, with multiple similar changes, farmers could completely phase out "this intensive style of dairy farming”. Support for change like this already exists, with some farmers across the country already phasing out palm kernels due to environmental concerns.
“It's really up to us New Zealanders to hold them to account and to kind of hold our values strong and call out greenwashing where we see it.”
