Fonterra: Trading Among Farmers

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Fonterra: Trading Among Farmers

On 25 June 2012, members (“shareholders”) of Fonterra had their 2nd vote about a far-reaching Fonterra Board proposal entitled “Trading Among Farmers” (TAF). During the years we have written a number of articles about Fonterra’s capital structure and merger (PhD dissertation, 2001), its fair value share and shortcomings, as well as the TAF proposal to replace it. In May 2012, a group of concerned Fonterra farmers trading as “Our Co-op”, commissioned CO-OP Champions to write a report completing the W&T in the SWOT analysis of TAF. The report “Fonterra Farmers’ Second Vote on TAF: A 2nd Opinion was published on 12 June. The Media release dated 14 June 2012 summarizes the core of our critique: “TAF privatizes Fonterra into a farmer-owned business”. I’ll be there in New Zealand on the 25th to witness the outcome of the vote. On June 21, this was my presentation to the NZ Society for the Study of Cooperatives and Mutuals in Wellington. The final outcome of the vote was that 66% of farmers voted in favor. Since the Board had argued 50% would be enough, the process went ahead. Trading commences in November 2012. Let’s hope the Board’s reiterated promise of “100% farmer ownership and control” will be kept.

Below you may find a summary of our various contributions as picked up in the media:

•Dairy Exporter article summarizing the report’s findings and some follow-up comments, dd. early July 2012
•WaikatoTimes article “Timely talk tackles TAF for farmers” dd. 28June 2012, reporting on presentation to the Federated Farmers Dairy Conference on the 27th
•Waikato Times article “Warnings of Curdled Cooperative”, echoing the medio release and main conclusion of the report, 19 June 2012
•RuralNews article “Report questions TAF’s need”, summarizing part 2 of the report, dd.19 June 2012
•DairyNews preview article “Share valuation the real issue” dd. 12 June 2012 (with full text submission)
•MAF submission dd. 10 March 2011 with RuralNews coverage.
•DairyNews article “Trading Among Farmers confusing”, dd. 27 April 2010 (comments on TAF 1st proposal)
•RuralNews article “Short-term plan panned” dd. 20 April 2010 (TAF 1st proposal)