NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Agribusiness

Farmers give Fonterra green light for share trading

Herald online
30 Jun, 2010 04:00 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Fonterra's dairy farmers have given the green light to a proposal to start share trading among farmers.

The landmark announcement made at a special meeting in Palmerston North this afternoon means Fonterra will no longer buy and sell shares from farmers based on their level of production.

Fonterra chairman, Sir
Henry van der Heyden said an overwhelming majority of voters - 89.85 per cent - supported the resolution.

The company's 10,500 farmer shareholders have been voting by post and internet for the past two weeks on whether to change their constitution to allow them to trade shares among themselves.

The scheme that will create a restricted market in Fonterra's shares and remove the need for it to set aside funds to pay out those either reducing their milk production or exiting the co-operative.

After milk production fell during the 2007/08 drought, Fonterra had to pay out $742 million of equity to farmers via redemptions.

Van der Heyden said the move to the 'Trading Among Farmers' scheme would be "a lasting solution that could remain at the core of our co-op's capital structure for many years to come.

"Effectively our vote today for Trading Among Farmers will, together with the co-op's new retention policy, take capital structure off the table for the foreseeable future."

Sharemilker and equity partnership dairy farmer Hugh Candy, who was at the Hamilton meeting, said there was a feeling of unity of Fonterra moving forward and that every farmer counted.

"The communication with Fonterra has been brilliant from the farmer perspective.

"Every farmer has a voice no matter their size and their vote counts," he said.

Van der Heyden said support for the change showed a clear awareness and understanding among farmers of the need to evolve and further strengthen Fonterra's capital structure.

"We knew when Fonterra was formed nine years ago that we would need to evolve our co-op's capital structure and develop a durable solution to address redemption risk.

Fonterra's Shareholders' Council issued a press release saying the vote was a "great outcome" for the co-op.

"Successful implementation of the scheme would give Fonterra Among "a stable platform while making sure the business remains owned and controlled by farmers," said council chairman Blue Read.

"These initiatives will bring a new set of stakeholders into the dairy arena and there are preconditions that must be met before Trading Among Farmers can be introduced. The preconditions have been developed so that the interests of Fonterra farmers and all stakeholders can be safeguarded."

"Farmers are at the heart of Fonterra. The Council is confident this proposal will ensure our co-operative continues to be farmer owned, farmer controlled and farmer focused," said Read in a speech at today's shareholders meeting.

Van der Heyden said the scheme would "stop money washing in and out of Fonterra's balance sheet from season to season and provide permanent capital to grow returns."

"As farmers we'll also know exactly what a Fonterra share is worth at any time. We'll have the flexibility to buy and sell shares when it suits our cash flows. And we'll have the choice to free-up some of our share capital through the Fonterra Shareholders' Fund.

"Trading Among Farmers will ensure Fonterra remains farmer controlled and owned, and that our loyal shareholders have an incentive to hold Fonterra shares and put more equity into our co-op," he said.

Chief executive Andrew Ferrier said with permanent capital Fonterra would be better-placed to take the long-term business and investment decisions to shape the co-operative's ongoing success.

He said Fonterra was "in a great place" with its reputation globally as a leading dairy provider, a strong business footprint and brand presence in the world's fastest-growing dairy markets.

"With a permanent and stable capital base, we can invest with confidence in long-term opportunities that build on our global competitive advantage and maximise the returns to our farmers for their milk - without the fear the money might be needed to fund redemptions," Ferrier said.

Federated Farmers dairy chairperson Lachlan McKenzie described the announcement as a red letter day for New Zealand's dairy industry and for the Fonterra Cooperative Group.

"We have a decisive yes vote to commence internal share trading. This secured nearly 90 percent approval off a turnout of just under 78 percent. Given that's almost the same turnout as for the 2008 general election, I'm safe to say it's decisive."

McKenzie also commended Fonterra's board, who had given shareholders the confidence they needed to vote yes by the way they handled the consultation process.




Farmer share-trading

What is it?

* Dairy farmer co-operative Fonterra was formed in 2001.

* At present, dairy farmers have to buy shares in Fonterra based on the level of their production.

* Under the proposal farmers would buy and sell shares among themselves through a Fonterra Shareholders' Market, rather than with Fonterra.

* A Fonterra Shareholders Fund would also be set up to enable farmers to sell the share benefits of distributions and changes in value but retain voting and milk payment rights.

* Farmers could be allowed to buy dry shares that do not have voting rights for up to 200 per cent of their production level.

Why do it?

* Remove the redemption risk of Fonterra having to pay farmers when they cash in shares.

* Provide the company with permanent share capital.

What's next?

* Proposal for share trading needs 75 per cent support. Farmers had the option of voting by post, on the internet or at today's special meetings around the country.

* It is expected to take at least 15 months to implement.

Discover more

Opinion

Would you buy shares in Fonterra if you could?

25 Jan 07:25 PM
Agribusiness

Fonterra farmers poised for landmark vote

28 Jun 04:00 PM
Agribusiness

Dairy prices down 14pc in Fonterra online auction

06 Jul 10:45 PM
Agribusiness

Govt handcuffs Fonterra to maintain milkflows to rivals

03 Aug 03:00 AM
Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Agribusiness

Agribusiness

Australian regulator clears Lactalis' proposed acquisition of Fonterra businesses

Business

NZ Super Fund-backed Kaingaroa Timberlands expands with Waikato land purchase

Markets with Madison

Rockets to ranches: How Halter's cattle collars turned a Kiwi start-up into a US$1b unicorn


Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

Advertisement
Advertise with NZME.

Latest from Agribusiness

Australian regulator clears Lactalis' proposed acquisition of Fonterra businesses
Agribusiness

Australian regulator clears Lactalis' proposed acquisition of Fonterra businesses

The ACCC found the acquisition unlikely to lessen competition in Victoria and Tasmania.

10 Jul 12:48 AM
NZ Super Fund-backed Kaingaroa Timberlands expands with Waikato land purchase
Business

NZ Super Fund-backed Kaingaroa Timberlands expands with Waikato land purchase

01 Jul 05:43 AM
Rockets to ranches: How Halter's cattle collars turned a Kiwi start-up into a US$1b unicorn
Markets with Madison

Rockets to ranches: How Halter's cattle collars turned a Kiwi start-up into a US$1b unicorn

23 Jun 05:00 PM


Solar bat monitors uncover secrets of Auckland’s night sky
Sponsored

Solar bat monitors uncover secrets of Auckland’s night sky

06 Jul 09:47 PM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP