Summary
- Fonterra settled a legal dispute with Greenpeace over a claim that ‘likely misled’ shoppers.
- The co‑op began phasing out the disputed packaging in late 2024 and confirmed the old label was no longer being manufactured by January 2025.
- The case highlights how premium grass‑fed claims face growing scrutiny, contrasting with a similar Kerrygold lawsuit in the US that was dismissed on the basis that consumers wouldn’t expect cows to eat only grass.
Fonterra has settled a two‑year legal battle with Greenpeace, admitting that a label claim on its flagship Anchor butter was likely to mislead consumers about how its dairy cows were fed.
The packaging featured two combined phrases – ‘100% New Zealand’ and ‘Grass Fed’ – which, taken together, may suggest the product is made from 100% grass-fed milk; when in fact, Fonterra’s cows are also fed non-pasture supplementary feed when grass growth is slower, eg in winter.
The label featured on Anchor butter sold in New Zealand grocery stores for a year and four months, between December 2023 and April 2025. The co-op scrapped the label claim and began introducing new Anchor butter packaging in mid‑to‑late November 2024, gradually phasing-out the existing product from stores.
“Fonterra accepts that the use of the two phrases in combination with each other was likely to mislead some New Zealand consumers, particularly those unaware of the nature of the feeds that are provided to dairy cows, and was in breach of section 9 of the Fair Trading Act 1986.
“The claim did not put in issue the question of whether or not the phrase ‘Grass Fed’ on its own was misleading, and Fonterra makes no admission that the words ‘Grass Fed’ in isolation are likely to mislead.”
Greenpeace spokesperson Sinéad Deighton-O’Flynn suggested that the dairy co-op had been “trying to convince customers that the Anchor butter they’re buying is 100% New Zealand grass-fed when this is far from the reality”, alleging that Fonterra sources palm kernel feed linked to deforestation (Fonterra has been contacted for comment and is a member of the Roundtable on Sustainable Palm Oil).
Fonterra says its cattle is 96% grass-fed, where ‘grass’ includes sileage, hay and forage crops. This definition is consistent with the national grass-fed administrative standard, says the organisation.
What does ‘grass-fed’ mean in New Zealand?
New Zealand has national ‘grass-fed’ standards for red meat and dairy, respectively.
For dairy to be ‘grass-fed’, cows must:
- be fed grass at least 90% on average as part of their diet;
- have access to pasture for at least 340 days for at least eight hours per day.
Only products processed from ‘grass-fed’ milk can carry the label claim.
Under the standard, supplementary feed is allowed in limited quantities, for example to meet energy and nutritional requirements. And the standard is lenient when supplementary feed use is required more than usual to offset the impact of adverse weather events, such as droughts and floods.
The dairy grass-fed standard defines supplementary feed as ‘imported feed which may include concentrates or food manufacturing by-products or wastes but not animal protein or a homegrown feed that is harvested and used later’.
Fonterra’s grass-fed definition exceeds the national requirement. The co-op’s dairy cattle is 96% grass-fed on average and spends more than 350 days on pasture.
Why ‘grass-fed’ use can be controversial
The global grass-fed meat and dairy market is a lucrative space worth more than USD $8 billion. In the US alone, grass-fed Irish dairy brand Kerrygold is a top butter product, with Ornua reporting record-breaking sales in 2025.
Such products typically command a premium due to positive taste, nutrition and animal welfare perceptions – meaning that improper use of the label can expose companies to legal challenges.
While Fonterra’s case resulted in a settlement with Greenpeace, not all similar cases have had the same outcome for the plaintiff.
In the US, Ornua faced a lawsuit for labelling its butter as being made from ‘milk from grass-fed cows’ when cattle had also been fed grains such as soy, corn and GMO grains, alongside grass.
But that case was dismissed after the judge ruled consumers wouldn’t reasonably expect cows to be fed only grass.
