Fonterra listing decision welcomed by farmers

Federated Farmers has welcomed Fonterra’s decision to scrap plans to list New Zealand’s most important company as being a major step forward for the Cooperative.

“By ruling out a listing, Fonterra and its directors are to be commended for listening to its member and member representatives,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“Listing had been a gorilla in the room with Fonterra’s capital structure review.

“There was simply no appetite among farmers for a listing. Members want to have control over their destiny and their cooperative.

“Federated Farmers remains absolutely committed to backing Fonterra’s growth into a super-cooperative. That’s what makes today’s decision a positive step forward.

“While Fonterra is New Zealand’s largest and most important company and one of the world‘s largest dairy companies, it is only the 31st largest global cooperative.

“In New Zealand, listing is given some mythical status as almost the only way to raise capital for growth. Listing was an option but the best option is to work with members to achieve the optimum capital structure tailored to our unique business landscape.

“The key to real sustainable business success is not some template solution, but by leveraging off what has made dairy such a successful business in New Zealand. That’s the thousands of dairy farmers who are committed to excellence and continual improvement.

“It’s a true partnership between members and management, but given the size of other global agricultural cooperatives, the cooperative route is a way forward whose time has now come.

“Federated Farmers looks forward to sitting down with Fonterra and the Shareholder’s Council to discuss how this future can be achieved,” Mr McKenzie concluded.