Fonterra blames media-savvy minority for extra TAF vote

BUSINESSDESK: Fonterra Cooperative Group will go back to shareholders one last time to get its Trading Among Farmers scheme over the line, after finding disquiet among global customers about apparent farmer opposition to the initiative.

Chairman Sir Henry van der Heyden said a vocal minority of Fonterra shareholders had gained traction in the local media.

This was spilling over into the global domain, “damaging Fonterra’s reputation and our global partnership” despite overwhelming farmer support for the scheme at a vote in 2010.

“We have to put a stop to this and use the special meeting to unify the shareholder base so we can get on with implementing the new refreshed business strategy,” he said.

“At the moment, all we are doing is destroying value and compromising potential business opportunities.”

The dairy exporter plans to hold a special meeting of shareholders on June 25 to discuss the detail of the plan and give farmer-shareholders a final vote to approve the deal.

“We will be asking shareholders to exercise their vote, respect the majority decision of the vote and then move on,” Sir Henry said.

“Anything else has the potential to be severely damaging to Fonterra’s future.”

Fonterra is looking for external capital to fund its global aspirations with the Trading Among Farmers project.

The would enable farmers to sell the dividend rights of their shares into a fund, which would then be available for investors to buy as units in a secondary market.

Last week chief executive Theo Spierings said Fonterra plans to invest in a new Indonesian plant as part of its growth plans in Asia.

Earlier this month it flagged a $100 million spend-up on building two new farms in China as it looks to produce one billion litres of milk in the world’s most populous nation by 2020.

Craigs Investment Partners has been appointed as the registered volume provider for the shareholders’ market, where the farmer owners can buy and sell shares among themselves.

Sir Henry said the board and Shareholders Council will have completed due diligence on the trading scheme by the time of the meeting.

If anything is discovered that is significantly different from the plan outlined in 2010 or needs further constitutional change, extra resolutions will be put to shareholders.

The new scheme also needs parliamentary sign-off, and the primary production committee has until June 1 to report back to the House after the Dairy Industry Restructuring Amendment Bill passed its first reading earlier this month.

At the time, Labour Party commerce spokesman David Cunliffe said the scheme creates a tension between farmer-shareholders looking for higher farm-gate payments and investors in the fund seeking fatter dividend returns.

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6 Comments & Questions

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What nonsense for a chairman and CEO with a very different focus from me, your shareholder supplier!

I have never spoken up in the media, or been asked for my opinion, but if you ask me, the more investors that aren't farmers involved in this company, the more control that will move away from us. Do we have the same dream of dominating the world that the CEO/Chairman might have? Or are we happy with growing our co-op slowly and steadily like we have our farms. I guess the vote will tell the story. I don't think I will change my mind

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Stop masquerading like you operate a farming operation.

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Didn't vote for it back in 2010,and won't vote for it in June either. If the fat cats want a slice of fonterra they can buy a dairyfarm .Van der Haydens excuses for his failure to provide a convincing argument for shareholders to support TAF, are becoming more far fetched by the day. Dam cow cockies reading newspapers and using the internet .What next !!!

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What is needed is for whining cow cockies to be removed from the privileged legislation they enjoy and to join the real world.
In the real world companies advance or fall on their merits, unlike fokterra, they do not have, privileged protection from fair competition granted to them by parliament.

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Do you actually do anything but complain?

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Now that a Chinese Company has bought a chunk of voting shares Mr Van der Hayden shouldn't have any trouble selling his scheme. Goodbye Fontera.

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