To allow TAF’s launch, the council must tick the ‘fifth box’, given that Fonterra’s board is indicating it has ticked the other four boxes including due diligence on the proposed share trading scheme. The new council chairman, Ian Brown, says there is “unanimous support” for TAF among the councillors. But can we really believe him? After all, only last month Couper and Brown were seen endorsing TAF, sitting with Fonterra chairman Henry van der Heyden before the Dairy Industry Restructuring Act (DIRA) parliamentary sub-committee.
Our sources say only 80% of the councillors believe TAF will deliver 100% farmer ownership and control. Will these other disgruntled councillors come out of the woodwork and resign, like Couper? Or will they continue to deceive Fonterra shareholders by publicly stating all is well while harbouring concerns in their hearts?
Three weeks out from the shareholder vote on TAF, the proposed share trading scheme remains unpopular among some shareholders. Most have concerns about milk price and the shareholders fund, which will sell share units to outside investors. A big fund means more share units could end up with outside investors. And the investors will demand a bigger dividend at the expense of the milk payout to farmers.
Couper’s resignation emboldens the group – dubbed a vocal minority by Fonterra – pushing for greater safeguards in TAF for 100% farmer control and ownership. It does little to settle nervous shareholders.
This week Fonterra directors and management will be crisscrossing the country, keen to rope in shareholders undecided on TAF. In tow will be Fonterra Shareholders Council members. Meanwhile Fonterra shareholders will be asking tough questions. But will they get the right answers?
Shareholders councillors need to come clean. Farmers must know whether the council is “unanimous” in its support for TAF, as stated last week by the new chairman Brown. Councillors with reservations must raise their hands. Putting on a show of unity in front of shareholders, when divisions run deep in the council, is not right. Couper has done the right thing by coming out. It’s time for all councillors to lay their cards on the table.
With three weeks to go before the vote, Fonterra farmers need the truth. Couper’s resignation may not be a fatal blow for TAF but if more councillors follow suit, it will leave the proposed scheme badly wounded.