Fonterra, Sharesies join to make share trading easier
Fonterra is teaming up with wealth app provider Sharesies to make it easier for its farmer shareholders to trade co-op shares among themselves.
Fonterra's bid to gain parliamentary approval for its new capital structure is fiercely opposed by rival milk processors.
Most independent processors want the Government to shelve its plan to amend the Dairy Industry Restructuring Act (DIRA), which will accommodate capital structure changes voted for by Fonterra shareholders late last year.
Submissions made to the Ministry for Primary Industries (MPI) on Cabinet's plan to approve the DIRA changes were made public last month.
The country's second largest milk processor, Open Country Dairy, submitted that it had "serious concerns".
"The Fonterra capital restructure will damage competition and innovation in the New Zealand dairy sector, harm productivity and leave Fonterra vulnerable," says Open Country chief executive Steve Koekemoer.
He refers to an analysis of the restructure and proposed DIRA changes from Castalia, a global economics and regulatory advisory firm hired by Open Country for the exercise.
Koekemoer claims it highlights the major risks for competition and productivity from granting Fonterra even greater ability to manipulate the milk price.
"We urge the Government to reject the capital restructure and not to proceed with these DIRA amendments.
"The Government committed in April 2022 to review DIRA more fundamentally, in response to the Productivity Commission's concerns about 2020 changes to DIRA.
"Not even one month later it is now considering even greater relief and favouritism for Fonterra."
But Koekemoer concedes that the restructure is likely to proceed as hinted by the Government.
In a joint submissions three smaller processors - Synlait, Miraka and Westland Milk - claim the Government has taken an "anti-investment and anti-competition position" by proceeding with the DIRA amendments.
"Government proposals have not fully taken into account the impact this will have on competition in the raw milk market and dairy processing in New Zealand," they say.
A key aspect of the original pro-competition provisions of the DIRA was to assure the unimpeded "free exit" of Fonterra members should they choose to supply milk to other parties.
However, the three processors claims this included provisions that ensured Fonterra could not discourage members from leaving by preventing them from accessing the full value of their investment on departure.
"In the original DIRA, Fonterra was required to redeem shares of existing members on the basi of a (presumably independently) assessed fair market value."
They claim Fonterra is now seeking further changes to DIRA to facilitate another change in its capital structure.
"Fonterra members will no longer to be able to exit Fonterra and receive fair market value for their shares."
Fonterra chairman Peter McBride says he doesn't know why other processors are concerned with the co-op's capital structure. "I find it quite intriguing; we have no interest in their capital structure," he told Rural News. "Why's our capital structure is so important to them?"
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
The Food and Agriculture Organisation of the United Nations (FAO) has welcomed a resolution adopted by the United Nations (UN) General Assembly to declare 2026 International Year of the Woman Farmer.
Waikato herd health veterinarian Katrina Roberts is the 2024 Fonterra Dairy Woman of the Year.
Trade Minister Todd McClay says New Zealand has no intention of backing down in a trade dispute with Canada over dairy products.
There have been leadership changes at the Hamilton-based Dairy Goat Co-operative, which has been struggling financially in recent years.
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