Speakers at the annual New Zealand Shareholders Association conference said that Fonterra's high debt levels combined with that of dairy farms could mean major concern for the economy of New Zealand.
The director of Devon Funds Management, Paul Glass said during the conference in Hamilton that Fonterra which is the largest dairy exporter in the world has a debt of $7 billion with earnings lower than $1 billion. He said, "Most banks will only lend three to four times earnings. Fonterra is very heavily indebted."