Farm Ireland
Independent.ie

Tuesday 12 December 2017

Could Fonterra allow overseas suppliers to own shares?

Fonterra processed 23bn L of milk last year, but not all from shareholderes.
Fonterra processed 23bn L of milk last year, but not all from shareholderes.
Margaret Donnelly

Margaret Donnelly

Fonterra's Chairman John Wilson has indicated that overseas milk suppliers could be allowed to own shares in the New Zealand co-op.

He told the recent New Zealand co-op business forum that overseas milk suppliers could be allowed to own shares in the co-op.

The Rural News Group in New Zealand reports that he did not rule out a co-op linkage with suppliers in other countries. The co-op is owned by its 10,500 Kiwi dairy farmer shareholders, but also collects milk outside New Zealand including Chile, Europe and Australia and has farms in China.

Of the 23bn L of milk that Fonterra processed in 2016, he said that New Zealand farmers supplied 17.5bn L of this.

It only started collecting milk from non shareholders in 2014, when it offered contracts to supply Fonterra without having to buy Fonterra shares.

Wilson told the forum that the opportunity to form some sort of cooperative linkage we certainly believe is possible. “It won’t be easy – surprise, surprise – but is certainly possible. My view is that those opportunities are becoming more real today than in the past.”

However, with the average New Zealand dairy farmer shareholder has NZ$880,000 (€570,00) invested in Fonterra, and its strong control and ownership mechanisms, it could prove difficult.

Federated Farmers dairy vice-chairman Chris Lewis says it’s a decision for Fonterra shareholders.

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