Fonterra Settles Lawsuit Over Misleading "Grass-Fed" Claims on Anchor Butter

Fonterra, New Zealand's largest dairy exporter, has acknowledged that its labeling of Anchor butter as “100% New Zealand grass-fed” was misleading. This admission comes after Greenpeace Aotearoa filed a lawsuit in September 2024, alleging that Fonterra breached the Fair Trading Act by misrepresenting the nature of its dairy cows' feed. The butter was sold between December 2023 and April 2025, during which time Fonterra's cows were supplemented with imported palm kernel, a practice that contradicts the grass-fed claim.

The New Zealand HeraldFonterra admits false “100% Grass-Fed butter” claims broke law

The lawsuit concluded with an out-of-court settlement, wherein Fonterra agreed to stop using the misleading label. An official statement from both parties indicated that the combination of “100% New Zealand” and “grass-fed” was likely to mislead consumers, particularly those unaware of the dietary practices of dairy cows. Following the settlement, Fonterra has modified its packaging to remove the “100%” designation, now labeling the product simply as “Grass-Fed.”

The New Zealand Herald

Greenpeace spokesperson Sinéad Deighton-O'Flynn characterized the case as a clear instance of greenwashing, emphasizing that the use of palm kernel, linked to environmental destruction, undermines the integrity of the grass-fed claim. Deighton-O'Flynn stated, “Palm kernel is a dry, gravelly cow feed that comes from the destroyed paradise rainforests of Southeast Asia. It isn’t grass, and to claim otherwise is misleading and deceptive.” She further criticized Fonterra for continuing to rely on palm kernel, which New Zealand imports in excess of 2 million tonnes annually, primarily for its dairy herd.

Fonterra admits false “100% Grass-Fed butter” claims broke law

The settlement has raised concerns about the transparency of food labeling in New Zealand, particularly in the dairy industry. Deighton-O'Flynn noted that many consumers would be alarmed to learn that their butter could be linked to rainforest destruction. She called for greater accountability from Fonterra, urging the company to phase out palm kernel entirely rather than merely altering its labeling practices.

Fonterra admits false “100% Grass-Fed butter” claims broke law

Fonterra's acknowledgment of misleading claims reflects a growing scrutiny of corporate practices regarding environmental sustainability. The company has stated its commitment to improving transparency in its product labeling. Greenpeace, on the other hand, views this settlement as a victory against corporate greenwashing, advocating for more stringent regulations to prevent misleading marketing practices.

Fonterra admits false “100% Grass-Fed butter” claims broke law

• “Greenpeace spokesperson Sinéad Deighton-O’Flynn says, “This is an open-and-shut case of greenwashing.” — Sinéad Deighton-O'Flynn, Greenpeace Spokesperson

Fonterra admits false “100% Grass-Fed butter” claims broke law

• “Most New Zealanders would be horrified to know that rainforests are being destroyed, with precious wildlife pushed to the brink of extinction, to grow cheap feed for Fonterra’s oversized dairy herd.” — Sinéad Deighton-O'Flynn, Greenpeace Spokesperson

Fonterra admits false “100% Grass-Fed butter” claims broke law

• “Deighton-O’Flynn says, “Companies shouldn’t deceive customers to sell products.” — Sinéad Deighton-O'Flynn, Greenpeace Spokesperson

Fonterra admits false “100% Grass-Fed butter” claims broke law

Following the settlement, Fonterra faces ongoing pressure from environmental groups to eliminate palm kernel from its supply chain. Greenpeace has been advocating for this change for over a decade, emphasizing the need for sustainable practices in the dairy industry.

Fonterra admits false “100% Grass-Fed butter” claims broke law