Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
OPINION: Tension's been simmering among Fonterra shareholders for some time.
Read: A group of Fonterra farmers want the Shareholders Council scrapped.
Some are unhappy with the co-op’s financial performance over the past two years, others are frustrated with the lack of information coming from the board of directors.
A group of shareholders are also venting their anger at the Fonterra Shareholders Council, a 25-member elected body tasked with the role of “representing the views of all shareholders as suppliers, owners and investors”.
It also meets regularly with Fonterra’s board and management to discuss the co-op’s performance.
Two years ago Fonterra shareholders were stunned to learn that their co-op had recorded its first ever net loss after tax of $196 million for the 2017-18 year.
What didn’t help either was confirmation that former chief executive Theo Spierings left with a final year’s salary of $8 million the same year.
Then things got worse. The following financial year, Fonterra posted a net loss of $605 million on the back of asset writedowns worth $826m, mainly on its offshore businesses.
Shareholders like Trevor Simpson, Jim Cotman, Mark Lumsden and Mike Peters of Waikato have had enough.
For them there must be a better and more efficient way for shareholders to keep a tab on their co-op’s performance.
The nasty surprises delivered by the board and management in 2018 and 2019 financial year must end.
Simpson and his group want the council to step up. That’s why the review of the council is crucial for the co-op and its 10,000 shareholders.
They want the council scrapped. Others may not be keen to go that far. But what’s certain is that things must change.
Right now the council has no say in how the co-op is run and the investments it makes both here and overseas.
The council reviews the performance of Fonterra’s investments years after millions of dollars have been poured into dud projects, like China Farms and Beingmate.
Therefore, it’s unfair to blame the council for Fonterra’s investment failures: accountability rests with the board and management.
But Fonterra directors’ hands are tired when it comes to talking directly to shareholders. NZX disclosure requirements means the co-op must deal carefully with market-sensitive information. This is the dilemma facing Fonterra. Trading Among Farmers (TAF) has broken the open and free-flowing communication link between shareholders and directors.
How can this link be restored? Will scrapping the council be enough?
These are the questions shareholders will ponder as they mull the future make-up of the council in the coming months.
NZPork has appointed Auckland-based Paul Bucknell as its new chair.
The Government claims to have delivered on its election promise to protect productive farmland from emissions trading scheme (ETS) but red meat farmers aren’t happy.
Foot and Mouth Disease outbreaks could have a detrimental impact on any country's rural sector, as seen in the United Kingdom's 2000 outbreak that saw the compulsory slaughter of over six million animals.
The Ministry for the Environment is joining as a national award sponsor in the Ballance Farm Environment Awards (BFEA from next year).
Kiwis are wasting less of their food than they were two years ago, and this has been enough to push New Zealand’s total household food waste bill lower, the 2025 Rabobank KiwiHarvest Food Waste survey has found.
OPINION: Sir Lockwood Smith has clearly and succinctly defined what academic freedom is all about, the boundaries around it and the responsibility that goes with this privilege.
OPINION: Should cows in NZ be microchipped?
OPINION: Legislation being drafted to bring back the controversial trade of live animal exports by sea is getting stuck in the…