September 29, 2025 • 5 mins
A farmer and a foundation member of Fonterra discusses the upcoming farmer vote for the co-op's $4.22 billion sale of Mainland to Lactalis. Plus, what questions farmers have been asking Fonterra about the deal at the co-operative’s road shows.
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Episode Transcript
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Speaker 1 (00:00):
Right, joining us now on the show, Greg Jan former
director of a Fonterra and of course experienced director and farmer. Greg,
welcome onto the show.
Speaker 2 (00:11):
Thank you very much. Good to be here.
Speaker 1 (00:13):
Yeah, good to chat. Okay, So, well, some pretty big
days are happening and continuing through to what the vote
starts and what October seventh I think for the whole
divestment yep, as my understand it, Yes, yep, okay, So
what's what's your role in this? Greg?
Speaker 2 (00:29):
Well, I guess my role is as a farmer, so
I get to vote as a farmer. And also I
cheer deary holding. So that's Fontia's largest shield at about
one percent of its milk. So yeah, a couple of roles,
I guess yep.
Speaker 1 (00:44):
So look, these are both challenging and exciting times as well.
The road shows are underway, and I understand that the
independent report document is with farmers, so they're getting plenty
of time to check this over.
Speaker 2 (01:01):
Yes, that's right. You know. I attend to the fong
Roy road show last evening, massive attendance and seem very
positive and some good searching question and it was a
very very good session.
Speaker 1 (01:12):
When you say good searching questions, Can you give us
a couple of examples of those, Greg.
Speaker 2 (01:16):
One would be around the transfer price. Obviously to lactalais
that you know we've got a good price for the product,
but we want to obviously be comfortable that you know
the prices are paying for fonter and milk in the
future is where it should be. And I guess we
got that comfort and just I guess the overall of
why why divest it? They would been the two key
(01:38):
themes that would have come out.
Speaker 1 (01:40):
So if somebody asked you that question, what's what's a
Greg Gens answer?
Speaker 2 (01:44):
Why my answer? I've guess there's a couple of answers,
and I guess I've had this view for long before this.
So first one is that whole supermarket area, which is
what we're talking about, really fast moving consumer goods, has
changed dramatically over the years. Supermarkets a good games. As
we know, large players have become more dominant, so small
(02:05):
capital can constrained players like us. You know, it's not
a place you can you can get good returns, and
we certainly aren't getting good returns versus the rest of
the business. I also think there's not a great fit
with a cooperative model because these things are incredibly capital intensive.
What we're good at is the ingredients space, specially ingredients,
(02:27):
and that's why. Actually we were getting three quarters of
our returns today and that was something I probably learned
last night. I didn't realize it had got to that level.
So selling this gets rid of a quarter of our
value added returns. But over the next three years, it's
projected that'll get back to status quo as especially ingredients
business gets more capital and more focus.
Speaker 1 (02:48):
Ingredients seventy five percent. That's quite Yeah, I'm a little
bit taken aback by that number. That's actually at that point.
So farmers, the interested parties here are wanting to see
that that that long term supply is what's locked.
Speaker 2 (03:03):
In long terms. Yeah. Yeah, two lacked aalis, but also
on terms that don't disadvantage frontier, I guess. So you
could do a sweetheart deal as far as the price,
but then on the other side you could give them
a ten good deal as far as the milk price goes.
That hasn't happened. It looks looks as it should look,
which is great.
Speaker 1 (03:21):
Yep. The average number that a shareholder farmer is going
to get from this, what's the sort of I mean,
it seems like a decent old whack, but I guess
it could be consumed quite quickly, couldn't it in any
farming environment.
Speaker 2 (03:37):
Yep. So smaller farmers these days are typically around one
hundred thousand milk solids. Just say that's two hundred thousand
dollars tax free, which I think we can't ignore. But
then the value of the shared technically no one knows,
should go down by two dollars as well. So it's
cash versus equity, if that makes sense. So your overall cast,
your overall financial position at the end of this shit
(04:00):
be pretty neutral. But you're getting the cash, you haven't
got equity.
Speaker 1 (04:05):
Those who are not so keen Did they have a
voice in fong Ray last night.
Speaker 2 (04:10):
I didn't actually hear one voice that wasn't keen. I
just had a lot of searching questions and you're sort
of can get a little bit of a feel of
the tone for the meeting. I think the tone was
that they were keen.
Speaker 1 (04:21):
Yep. Yeah, and I'd expect that to continue. I guess
it seems like when you talk about that our ingredients
is seventy five percent of the business that that that
theme will continue of positivity.
Speaker 2 (04:35):
Yep, I agree, and I think Fontier has kind of
probably got quite a job to around the comms on that.
I think, you know, the few politicians have had to
say in things, and I don't think they quite realized
the scale of Fonterra's value add ingredients business. I think
there's a bit of work to be toun of that
to get New Zealand link over the line.
Speaker 1 (04:53):
Yeah, yeah, yeah, no, Okay, Well, and there's what three
or four more meeting three or four more days of
meetings and then the vote starts off over seventh and
things will and then when do you sort of see
this all getting crunched out.
Speaker 2 (05:05):
In the new year. The sort of indicative number was
around February. The deal might be the few things to
work through Commics, Commission and the light, but Farmer's obviously
the most crucial. So I guess they haven't got a
firm date when it'll go live, but I think that
the hope is far nearly in the new year.
Speaker 1 (05:22):
Yeah, great, staff, Greek, thank you very much for joining us.
And what do you do do you get any time
to get back to your own farm or what do you.
Speaker 2 (05:31):
Keep right at the moment as much as I can.
That's just my happy place. Were getting back to a
little old rually. It's good north.
Speaker 1 (05:39):
Oh right, up real. Gee, that's quite a way up north. Yeah, good,
good good. No earthquake country too, apparently up north.
Speaker 2 (05:48):
Yeah, no earthquakes, And good fishing your canas
Speaker 1 (05:50):
For fantastic Greek, thank you very much.
Right, joining us now on the show, Greg Jan former
director of a Fonterra and of course experienced director and farmer. Greg,
welcome onto the show.
Speaker 2 (00:11):
Thank you very much. Good to be here.
Speaker 1 (00:13):
Yeah, good to chat. Okay, So, well, some pretty big
days are happening and continuing through to what the vote
starts and what October seventh I think for the whole
divestment yep, as my understand it, Yes, yep, okay, So
what's what's your role in this? Greg?
Speaker 2 (00:29):
Well, I guess my role is as a farmer, so
I get to vote as a farmer. And also I
cheer deary holding. So that's Fontia's largest shield at about
one percent of its milk. So yeah, a couple of roles,
I guess yep.
Speaker 1 (00:44):
So look, these are both challenging and exciting times as well.
The road shows are underway, and I understand that the
independent report document is with farmers, so they're getting plenty
of time to check this over.
Speaker 2 (01:01):
Yes, that's right. You know. I attend to the fong
Roy road show last evening, massive attendance and seem very
positive and some good searching question and it was a
very very good session.
Speaker 1 (01:12):
When you say good searching questions, Can you give us
a couple of examples of those, Greg.
Speaker 2 (01:16):
One would be around the transfer price. Obviously to lactalais
that you know we've got a good price for the product,
but we want to obviously be comfortable that you know
the prices are paying for fonter and milk in the
future is where it should be. And I guess we
got that comfort and just I guess the overall of
why why divest it? They would been the two key
(01:38):
themes that would have come out.
Speaker 1 (01:40):
So if somebody asked you that question, what's what's a
Greg Gens answer?
Speaker 2 (01:44):
Why my answer? I've guess there's a couple of answers,
and I guess I've had this view for long before this.
So first one is that whole supermarket area, which is
what we're talking about, really fast moving consumer goods, has
changed dramatically over the years. Supermarkets a good games. As
we know, large players have become more dominant, so small
(02:05):
capital can constrained players like us. You know, it's not
a place you can you can get good returns, and
we certainly aren't getting good returns versus the rest of
the business. I also think there's not a great fit
with a cooperative model because these things are incredibly capital intensive.
What we're good at is the ingredients space, specially ingredients,
(02:27):
and that's why. Actually we were getting three quarters of
our returns today and that was something I probably learned
last night. I didn't realize it had got to that level.
So selling this gets rid of a quarter of our
value added returns. But over the next three years, it's
projected that'll get back to status quo as especially ingredients
business gets more capital and more focus.
Speaker 1 (02:48):
Ingredients seventy five percent. That's quite Yeah, I'm a little
bit taken aback by that number. That's actually at that point.
So farmers, the interested parties here are wanting to see
that that that long term supply is what's locked.
Speaker 2 (03:03):
In long terms. Yeah. Yeah, two lacked aalis, but also
on terms that don't disadvantage frontier, I guess. So you
could do a sweetheart deal as far as the price,
but then on the other side you could give them
a ten good deal as far as the milk price goes.
That hasn't happened. It looks looks as it should look,
which is great.
Speaker 1 (03:21):
Yep. The average number that a shareholder farmer is going
to get from this, what's the sort of I mean,
it seems like a decent old whack, but I guess
it could be consumed quite quickly, couldn't it in any
farming environment.
Speaker 2 (03:37):
Yep. So smaller farmers these days are typically around one
hundred thousand milk solids. Just say that's two hundred thousand
dollars tax free, which I think we can't ignore. But
then the value of the shared technically no one knows,
should go down by two dollars as well. So it's
cash versus equity, if that makes sense. So your overall cast,
your overall financial position at the end of this shit
(04:00):
be pretty neutral. But you're getting the cash, you haven't
got equity.
Speaker 1 (04:05):
Those who are not so keen Did they have a
voice in fong Ray last night.
Speaker 2 (04:10):
I didn't actually hear one voice that wasn't keen. I
just had a lot of searching questions and you're sort
of can get a little bit of a feel of
the tone for the meeting. I think the tone was
that they were keen.
Speaker 1 (04:21):
Yep. Yeah, and I'd expect that to continue. I guess
it seems like when you talk about that our ingredients
is seventy five percent of the business that that that
theme will continue of positivity.
Speaker 2 (04:35):
Yep, I agree, and I think Fontier has kind of
probably got quite a job to around the comms on that.
I think, you know, the few politicians have had to
say in things, and I don't think they quite realized
the scale of Fonterra's value add ingredients business. I think
there's a bit of work to be toun of that
to get New Zealand link over the line.
Speaker 1 (04:53):
Yeah, yeah, yeah, no, Okay, Well, and there's what three
or four more meeting three or four more days of
meetings and then the vote starts off over seventh and
things will and then when do you sort of see
this all getting crunched out.
Speaker 2 (05:05):
In the new year. The sort of indicative number was
around February. The deal might be the few things to
work through Commics, Commission and the light, but Farmer's obviously
the most crucial. So I guess they haven't got a
firm date when it'll go live, but I think that
the hope is far nearly in the new year.
Speaker 1 (05:22):
Yeah, great, staff, Greek, thank you very much for joining us.
And what do you do do you get any time
to get back to your own farm or what do you.
Speaker 2 (05:31):
Keep right at the moment as much as I can.
That's just my happy place. Were getting back to a
little old rually. It's good north.
Speaker 1 (05:39):
Oh right, up real. Gee, that's quite a way up north. Yeah, good,
good good. No earthquake country too, apparently up north.
Speaker 2 (05:48):
Yeah, no earthquakes, And good fishing your canas
Speaker 1 (05:50):
For fantastic Greek, thank you very much.
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