John Stevenson: Fonterra Co-operative Council Chair says farmers are thinking long term

The Fonterra Shareholders Council says farmers are taking a long-term view when deciding whether to sell off brands like Anchor and Mainland.

Voting closes today, on a proposal to sell Fonterra's consumer arm to French company Lactalis for 4.2 billion dollars.

Fonterra's targeting a capital return of about 400-thousand dollars to the average farmer.

But Council Chair John Stevenson told Mike Hosking that farmers are thinking well beyond short-term benefits.

He says farmers are also thinking about their long-term livelihoods, as they'll be continuing to supply milk well after any capital return.

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Episode Transcript

Speaker 1 (00:00):
It's a big day for Fonterra shareholders of course, four

(00:02):
point two billion dollar decision, the sale of the consumer
armed to Lactales or like Talis. John Stephenson, as the
Vonterra Cooperative Council chairm as with us, John morning, Good morning,
Mike result aside. Has this been exciting for the farming
community or not really.

Speaker 2 (00:16):
Well, certainly it's one of the biggest decisions Fonterra shareholders
will make. It's been an eighteen month process, so there's
there's no doubt there's been really strong engagement from our
farmers in real interest and what it means for us
as supplies of milks.

Speaker 1 (00:30):
How much is it just about the chair I'm getting
four hundred thousand dollars yes or no? And how much
of it's about the bigger picture of the long term deals,
what it means et cetera.

Speaker 2 (00:39):
Well, farmer's certainly done their true diligence on it, myke.
I mean it's important to bear in mind this is
our wildlihoods will be supplying milk well after any capital
return if the votes successful. So we've we've encouraged farmers
to look through the capital return. They've they've engaged in
that they've got a lot of confidence from not just
what they've heard from Fonterra, but all so we commissioned

(01:01):
an independent report on their behalf which reinforced what Fonterra
has been telling.

Speaker 1 (01:05):
Farmers as the ten year bit your supply for ten years.
Has that been an issue or not.

Speaker 2 (01:10):
It's certainly been a hot topic a discussion between farmers
and Fonterra. And certainly what Fontira have told us and
we've had independently tested, is that he look, you know,
this partnership is really important. I think Fonterira will do
everything they can to make it work. It's really important
to make it work. But you know, farmers have been
interested in the water scenario, and you know, if you

(01:33):
look at some of the investments Fonterra is making around
advanced proteins and butter and u HT in our regions,
that worst case scenario, Fonterra can still carry on.

Speaker 1 (01:45):
If it comes to that theoretical question, how much of
about today's decision or how much about today's decision is
because Miles and co run this place properly as opposed
to what Fontira was once upon a time, And if
they told you the same story, would you feel the same.

Speaker 2 (01:59):
There's no out that there's runs on the board from Miles,
his management team and the board. Mike. Farmers have a
lot of confidence in that. But also in the back
of our minds, Mike wasn't too long ago that Fonterra
was an entirely different story. So I can certainly attest
that the farmer meetings is still a healthy degree of
skepticism in questioning when Fonterra brings something like this in

(02:21):
front of farmers.

Speaker 1 (02:22):
And your scenes say it goes ahead and the four
point two billion comes to their country, how much of
it's going straight to the bank to retire the overdrive
versus how much is getting spent in the community.

Speaker 2 (02:33):
Farmers have repaid a lot of debt over the last
year or two. Certainly, what I'm hearing from farmers is
that they'd like to do a bit of that. But
there's no doubt that this will, if successful, will be
a real injection into the regional economies and farmers talking
about what plant they can replace, what they can invest in.
But also given the weather in the last couple of days,
they have already been plenty of generators bought.

Speaker 1 (02:56):
Exactly good on your Jongo Well Today, John Stevenson, the
Fonterra Cooperative Council cheerwoo us this morning teen thirty I
think is the meeting. We'll know by early afternoon.

Speaker 2 (03:04):
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