The Country 13/03/25: Professor Keith Woodford talks to Jamie Mackay

One of the sharpest minds in agriculture wants Fonterra to offer Kiwis a bite of dairy cherry with an IPO floating of its consumer brands business. 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
An next guest on the Country possesses one of the
sharpest minds in New Zealand agriculture, even if he's having
a bit of a battle at the moment with his body.
Professor Keith Woodford from Lincoln University and Keith, I was
alerted to some comments you'd made online online about Fonterra
selling its consumer brand business. You're saying that the decision

(00:21):
to sell the consumer brands is no longer a debate.
It's happening. But the options are whether we should sell
to an existing international dairy marketer whose options are based overseas,
or an IPO, an initial public offering here in New
Zealand keep ownership of that in New Zealand. Surely the latter,
Keith Woodford, is a win.

Speaker 2 (00:42):
Win, Yes, it is. It's something that all sides of
politics should be able to get their mind around, all
reasonable people. But it just needs to be the flag
needs to be waived just a bit more at the
moment and the broader New Zealand community needs to understand

(01:06):
that this is an opportunity for all New Zealand to
become involved in the dairy industry as shareholders in what
Fonterra is saying would be called mainland and Mainland would
own well, they would be the international market of both

(01:27):
in New Zealand and overseas of consumer branded products. Gosh,
it really just should be a windwind.

Speaker 1 (01:37):
Now let's just go back a step. I take it
that you are wholeheartedly in support of Fonterra selling its
consumer brands business.

Speaker 2 (01:45):
When they came out with that a year ago, I
was nervous because I think it's important that Fonterra retains
an open window through into the what's happening in the
consumer world. The idea of Fonterra just selling bulk products,
be it as commodities or food service, that left me

(02:10):
very nervous as the world changes, as it inevitably will do.
When Fonterra first talked of selling the consumer brands, the
talk seemed to be very much of selling to an
overseas company. Hey, that made me nervous. However, I see

(02:35):
now that Fonterra is actively exploring the two alternatives, one
being to sell to a trade buyer who would come
from overseas, the other being a IPO, a public offering,
so it would become a public company on presumably the

(02:56):
new Zealand Stock Exchange could be New Zealand and Australian
Stock Exchange, but I think it be good of its
headquartered here in New Zealand and ideally Fonterra would retain
a minority stake, so that'd still be at the board table,
but they wouldn't control the board. The company would have

(03:19):
its own totally different culture which relates to fast moving
consumer goods and it's something we could all be be
part of.

Speaker 1 (03:29):
Yeah, Okay, just to finish on because I'm running out
of time. So you're also suggesting that the superfund or
ACC could be ideal cornerstone investors if it was floated
on an IPO.

Speaker 2 (03:42):
Yes, remember that there's a number of superannuation funds. There's
the Government Superination Fund, but there's also all the other
private funds that most of us is where our retirement
savings go. And I'm pretty sure that there's some of
those would be interested in taking a significant steak and

(04:04):
then the rest of it gets floated for all of
us that we can buy buy shares on the sheer market.
So it's an exciting idea and we've got to get
not just farmers on side, because the board would be
able to sell this, I'm sure to the farmers and
would still bring in a lot of capital, but we

(04:28):
need to get urban New Zealand on board as well.
But hey, this is exciting. What I'm saying is that
there is more than an industry. It's part of our
New Zealand DNA. It's incritically important to all of us,
and hey, this is one way that we can all
get an explicit steake.

Speaker 1 (04:50):
Professor Keith Woodford always good to catch up with you.
That mind is still as sharp as a tack.

Speaker 2 (04:56):
Good luck, d Sammy