It has been a bitter and divisive campaign. Those opposed to TAF made their point passionately in the media. Fonterra, on the other hand, pulled out its top guns – current and former – to hammer home the benefits of the scheme and the dangers posed by redemption risk.
Greatly outnumbered by Fonterra’s PR and legal resources, those opposed to TAF pooled their resources and with the help of donations put up a worthy campaign. Their views on TAF and anxiety over losing ownership and control of the co-op resonated with some shareholders.
For Fonterra’s sake, it’s time for the fighting to stop. Firstly, the Fonterra board and the Shareholders Council must decide whether farmers have handed them a “a clear mandate” to proceed with TAF.
If the ‘yes’ vote has not been decisive, question marks will hang over TAF. Fonterra cannot continue to operate with a shaky balance sheet with redemption risk hanging over it. Something must change and the Fonterra board must go back to weary shareholders for another round of consultations.
If the vote is deemed to be a clear mandate for the board and council, then everyone must get behind the co-op leaders.
Fonterra has a sound growth strategy in place. It is setting up farms in China and, given that a Danish co-op recently announced a major deal with China’s leading dairy processor, our co-op is seen to be on the right track. But a solid balance sheet is useless unless the shareholders are united.
Investing money in overseas markets is high risk. Therefore it will need to be done with a safe balance sheet, not one where share redemption causes money to wash in and out. At the same time a fractured shareholder base will damage Fonterra’s reputation overseas.
For Fonterra’s future a united shareholder base is vital. As the smoke clears from yesterday’s vote, all eyes will be on the board and council for leadership.
Unity without TAF is acceptable but TAF without unanimity among shareholders is not.
After all, it’s the cooperative spirit that makes Fonterra stand out from the rest.
