Fonterra Suppliers Confident in Mainland Dairy Future
Fonterra's 460 milk suppliers in Australia, who will switch to Lactalis end of this month, are unfazed with the impending change.
That’s the message from Labour primary industries spokesman Damien O’Connor. He was responding to news that Fonterra may shed upwards of 1500 jobs in a restructure, and to the financial problems facing dairy farmers because of the low pay-out and more hard times ahead.
O’Connor says many farmers are concerned about the performance of Fonterra, its problems, and some of the decisions taken by its chief executive Theo Spierings.
“I suggest Theo voluntarily cut his salary in half as an acknowledgement of his commitment to get Fonterra into a better place.
“The company can’t afford to have farmers who want to leave and… staff who will have to leave.
“The feedback I am getting from across the industry is that there is a growing level of frustration about Fonterra. Farmers are taking a big cut and that’s why I’m asking Theo to share their challenge to get through this. It’s not tokenism, but a genuine commitment to acknowledge the pressure they are all under.”
O’Connor says it’s important the chief executive of Fonterra has his management team and staff behind him and that he has the support of farmers. But the staff, though loyal, must be very unsettled.
He says for Fonterra to work through this challenging time will require absolute commitment from all staff, which he cannot see given the cloud of redundancy over them.
“Farmers can accept the fluctuating payouts if they have faith in the company doing the right thing. This is a very complex company that has a huge challenge.
“If Fonterra can’t explain that in clear terms to their farmer owners and suppliers then they are in trouble and I think that is where we are at. The communication with farmer suppliers seems to be a consistent issue.”
O’Connor says he’s an absolute supporter of Fonterra and says his comments are intended to support farmers and to encourage Fonterra to succeed.
No link to milk price
Dairy News sought comment from Fonterra about Damien O’Connor’s request for Theo Spiering to take a 50% cut in his salary. We got a written response attributed to managing director people, culture and strategy, Maury Leyland.
She says to ensure Fonterra remains competitive in the market, its pay bands are based on industry standards obtained from independent remuneration consultants.
“Fonterra’s pay bands have never been linked to the milk price. However, short and long term incentive plans can be linked to the cooperative’s financial performance.
“We recognise that we have not met our farmer shareholders’ or investors’ expectations and that we need to significantly step up our performance. That is why Fonterra is undertaking a business review to identify areas where we can accelerate our strategy and improve performance.”
