Garry Reymer: Fonterra Shareholder and Supplier talks about the company's major sell off

Signs are looking good for Fonterra's major sell-off to get the green light this morning. 

By 10:45 today, the shareholders will decide if selling big brands like Anchor and Mainland to global dairy giant Lactalis is the right decision. 

Fonterra Shareholder and Supplier Garry Reymer told Ryan Bridge that the majority of shareholders seem to be in favour of the sale.

'I hear a few farmers who tell me they're gonna vote against it, but by and large the majority seem to accept,'

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Episode Transcript

Speaker 1 (00:00):
Signs are looking good for Fonterra's consumer brand sail off
to the French getting the green light this morning. We'll
know it around ten forty five. Gary Raymer is a
Fonterra shareholder and supply joining us this morning. Morning. Gary, right,
good to have you on the show. So what do
you reckon? I mean, it seems like it's kind of
a foregone conclusion once you'll read on it.

Speaker 2 (00:21):
Well, you can never say never, can you? But yeah,
I hear a few farmers who tell me they're going
to vote against it, but by a large majority it
seemed to accept management in the board's rationale for games
to go and ed with it with the sale.

Speaker 1 (00:39):
Yes, which way did you vote?

Speaker 2 (00:41):
Carry?

Speaker 1 (00:41):
Can?

Speaker 2 (00:41):
I ask? Oh? Yeah, more than happy to say I'll
voted in favor. Why was one of the one of
the tipping points for me was that it is only
seven percent of I'm not going into into the brand's business,
and I thought, so, it's not taking out a big
chunk of our milks. You know that parts should want

(01:04):
to source their milk elsewhere, and I don't know why
they would because they like our carbon footprint, which you know,
the same with newspapers all these companies they want to
get our product because we've got to lower carbon footprint
for taking users as part of the marketing. So I
don't think they'd ever walk away from our milk, but
it was still affected in my consideration. But the other

(01:25):
part too, I think it takes a lot of noise
out of the farmer arena as well when we operate
business for business rather than business consumer and there's a
lot of other things farmers can deal without having to
worry about whether people complain about the price of better.

Speaker 1 (01:43):
It's a very good point, one well made.

Speaker 2 (01:45):
Gary.

Speaker 1 (01:46):
What do you think farmers are going to do with
the proceeds? I mean there's a lot of there's a
lot of on farm cost increases that you've been wearing
for years. Now, do you pay off some mortgage you know,
do you pump it back in? What happens to it?

Speaker 2 (02:00):
Yeah? I think there'd be a wide range of things.
I think what do you need to remember as well?
And what people need to remember. They think, oh, it's
going to be a windfall for farmers. Yes for some farmers,
and may well be, but they'll be pretty long in
the tooth. When Fonterira is formed and I'm not one
hundred percent clearing the numbers anymore, but we were roughly

(02:21):
thirteen billion liters of milk and we've climbed over twenty
billion leads. The share price when Fonterira was formed was
four dollars a kilo and the climb to eight dollars
a kilo, so a lot of that new milk was
paid for backed by shares which farmers have to have,
you know, one shear or used to have to have

(02:41):
one shep for every kg, and milk solis, so that
milk or that increased production was brought out between four
and eight dollars a share price. So all this is
doing is returning to capital that some of those farmers
probably paid five or six or seven dollars for and
bringing it back down and say they have carried that
death in the balance sheet and now they can repaid

(03:02):
some of that deck because the share points has been
a lot lower. It's back up of six, but it
will also drop back down. So you know, all of
this is are replacing capital ont of balance Hee, there
was there taken away and then we'll be taken away
again after after the distribution.

Speaker 1 (03:18):
Very great perspective. Thank you, Gary.

Speaker 2 (03:21):
Raymer.

Speaker 1 (03:21):
Fonterra shareholder supply voted yes. For more from Early edition
with Ryan Bridge.

Speaker 2 (03:27):
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