Jamie Mackay: The Country host on Richard Allen being named Fonterra's new CEO

Fonterra has named Richard Allen as its new chief executive, succeeding Miles Hurrell.

Allen - who joined Fonterra as a graduate in 2008 and has worked in various roles across the dairy co-operative - will take over next month.

Hurrell will remain in a transition advisory role until September.

The Country's Jamie Mackay explained further.

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Episode Transcript

Speaker 1 (00:01):
The Rural Report with farmland, skid advice and support growing
what really matters.

Speaker 2 (00:06):
Jamie mckaie, Host of the Countries with Us, Hello.

Speaker 3 (00:08):
Jamie good A, Heather, how are you going very well?

Speaker 2 (00:12):
Thank you? So tell me what you make of Fonterra's
new boss.

Speaker 3 (00:16):
Ah, Well, I've met the bloke a few times. See Look,
I think it was the world's worst kept secret that
he was the anointed one. Peter McBride, the Chair, was
on my show today saying that Miles Hurrell had initiated
succession planning as long as five years ago. So Richard Allen,
he's got a I think his title as President of
Global Ingredients. Spent quite a bit of time in America

(00:38):
to get a title like that. But he's in charge
of the ingredients business, which is now more important than
ever for Fonterra because they've obviously sold their consumer brands
and as of today, the farmer's got the check for that,
swapping effectively an assets for cash. Because yet I've got
two dollars a share, but basically the shares have dropped

(00:59):
by two dollars in simple mathematical equation. But it's still
good news for the new Zealand economy, whether it's lifting
the GDP by as much as one percent. So this appointment,
by the way, and I didn't hear your show yesterday,
and I don't know whether you cover it or not,
and whether I'm repeating old ground here, but just twenty
eight days after the Miles Hurror resignation, would have to

(01:23):
suggest to you that this was an inside job. And
it's a good inside job as well, because I don't
want to relitigate history. But last time we had a
flash for and a come in it ended in tears
for Fonterra. Miles Hurrall's come from the coal face, as
has Richard Allen. He's worked at my milk and farm
source and farm sources, that Fonterra store that all the

(01:45):
farmers deal with. Legend has it Miles Hurrell knew just
about the name of every single Fonterra farmer. I'm exaggerating
a wee bit there, but he certainly had a lot
of FaceTime to use modern terminology with them. Richard Allen's
the same look a good appointment.

Speaker 2 (02:01):
What is this warning from the accounting firm in index?

Speaker 3 (02:05):
Yeah, well this was an interesting one to me because
it is a bit of a windfall. The average payout
is four hundred thousand dollars. It is a return on capital.
Therefore there isn't a tax implication, but there could be
tax implications in Index and other accounting companies too. I
might saying, I just read their press release. They're saying

(02:27):
taking funds out of a company structure without tax implications
is not likely. They're saying if the Fonterra shareholding is
held in it by a dairy farming company, and many
of the farms will be company set ups spending funds
on things that are not assets of the company heither,
such as holidays or a new car, and if I

(02:49):
got four hundred grand from Fonterra, I'd be out for
both of those. They cannot be done here that without
triggering tax consequences. So look the messages to the Fonterra farmers.
No doubt they will banked at today. A lot of
them might have paid the whole lot, used the whole
lot to pay off debt. That's the best form of investment.
Others will be making spending decisions. The advice is just

(03:11):
talk to your consultant or financial advisor before you spend
the money.

Speaker 2 (03:16):
Yea fair advice to give. I think, now, listen, how
have the Kiwi fruit done with the cyclone?

Speaker 3 (03:22):
Really well, really well? Actually I'm involved in a wee
bit of very small involvement too, I might add hither
with a Kiwi fruit growing business in the Bay are
plenty in Gisbon and cyclone Gabrielle and twenty twenty three,
it absolutely got smacked, especially in the Gisbon region. And

(03:43):
even though there's a lot of surface flooding, a lot
of wind damage, there's trees down, and we're certainly not
be littling or writing off the effect that cyclone Vayan
who had, But it moved through so quickly that it
hasn't rarely been an issue for the Kiwi fruit industry.
They're right in the middle of harvest at the moment
the red stuff swell through. The gold harvest is about

(04:04):
forty percent of the way through, so they're right at
the peak there and the green has sort of just
got started. It's last cab off the rank with about
ten percent of the harvest done. But what the warry
is after the surface flooding. Keyw fruit don't like wet feet,
so if the water hangs around for too long, that's
no good. And the other one is wind rub with
these high winds that came through you know, keyw fruit

(04:26):
rubbing against one another effectively or against a branch, and
that scars the fruit and therefore makes it less valuable.
It's not top grade exports stuff. But all in all,
Heather are bullock dodged?

Speaker 2 (04:37):
YEP, sounds like it, Hey, Jamie has always Thank you
so much, look after yourself, Jamie McKay, host of the Country.

Speaker 1 (04:43):
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