Tuesday, 17 July 2018 09:55

Fonterra faces ‘crisis of confidence’

Written by  Sudesh Kissun
Former Fonterra director Leonie Guiney. Former Fonterra director Leonie Guiney.

Former Fonterra director Leonie Guiney says the co-op is facing a crisis of confidence.

She says the dairy co-op’s balance sheet is no longer in a position to handle more of the investment culture, while its leadership continues to deny there are any issues with strategic direction.

Guiney, a director for three years, says because the current leadership is overseeing the recruitment of a new chief executive, farmers face more of the same from the co-op.

“We have no indication of any review of Fonterra’s strategic direction, however, before they make this choice,” Guiney told Rural News.

“It’s hard to know what type of person you need if you haven’t articulated where you are going. When Fonterra has clarified a strategic direction shareholders can support with their capital, we will be able to employ the appropriate management and we will retain our milk supply. 

“That may be specialist ingredients experience, for example, an area in which we have competitive strengths.

“Whatever the choices, Fonterra shareholders aren’t fools; they’ve heard the rhetoric on offshore milk pools for example, but they can read the numbers; these are not delivering to NZ farmers,” Guiney says.

“I firmly believe we must work together to retain our competitiveness and that our future is a cooperative one, but not without accountability for board and management’s performance with the owners’ capital.”

Guiney claims that if shareholders are not convinced, they will leave with their milk, which ultimately leaves Fonterra uncompetitive within NZ and in a destructive procurement-war cycle.

“We don’t need to let ourselves get to that position; what we do need is better-targeted investment in our areas of comparative advantages.” 

» Connect with Rural News

More like this

Two re-elected to co-op

Re-elected Fonterra directors Andy Macfarlane and Donna Smit are looking forward to another three years on the board.

» The RNG Weather Report

Featured

Hot cows affect reproduction

Heat stress has a big effect on reproduction, explains Greg Jarratt, vet and director of Matamata Veterinary Services.

 

Speakers lined up for expo

A strong lineup of industry speakers will feature at this month’s NZ Effluent & Environment Expo in Waikato.

» Connect with Rural News

» Connect with Rural News

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Job hunting?

A mate of the Hound reckons outgoing special agricultural trade envoy Mike Petersen, who is due to finish his current…

Hot air?

With the Government wanting to implement huge costs on the livestock farming sector by making New Zealand the only country…

» Connect with Rural News