Fonterra has defended a so-called 'culture of extravagance' which has crept in since the cooperative was formed.

At the annual meeting, more than 1500 of Fonterra's 13,000 shareholders gathered at seven venues to pose questions arising from the group's first annual report. Cambridge-based shareholder Gary Reymer said corporate costs had exceeded those identified in the merger business case by NZ$80m (US$37.7m) and were $34m over budget.

Wanganui-based shareholder David Hopkins, on an audiovisual link, roundly criticised the levels of salaries and bonuses and $72min consultants' fees. "If salaries and bonuses would fluctuate in future, like our milk payouts, that would be great," he said.

Outgoing chairman John Roadley defended the cooperative's expenditure, saying it needed large numbers of consultants during the run-up to and creation of the merger. He expects consulting costs to be reduced now that the cooperative is up and running. Roadley also said he could see no extravagant spending in the Auckland head office.