Solid third quarter result for Fonterra
Fonterra has announced an improved third quarter performance – with a profit after tax of $1.15 billion, up $119 million on the same period last year.
The primary production select committee released its report on the Dairy Industry Restructuring Act (DIRA) Amendment Bill, giving the green light to the co-op's new flexible shareholding structure.
The bill will now go through a second and third reading in Parliament before it can be passed into law. Fonterra remains hopeful this can be done before the end of the year.
In an email to farmer shareholders, Fonterra chairman Peter McBride says the co-op is satisfied that it is moving in the right direction.
"We are pleased to see the adoption of some of the key changes we advocated for in our submission," he told farmers.
The most significant of these related to the potential for third parties to take enforcement action against the co-operative for any perceived breaches of the Milk Price oversight regime.
McBride says the select committeehas recommended this provision be removed.
"We are also encouraged to see that some of our requested changes to the information disclosure requirements have been reflected in today's report."
But he points out that some other changes proposed by Fonterra were either only accepted in part, or rejected by the committee.
McBride notes that the committee has recommended to retain new individual liability provisions related to the Milk Price oversight regime. However, they limited these in line with the defences Fonterra put forward in its submission.
"We are also disappointed that the committee did not support our request to remove the additional powers of direction for the Commerce Commission.
"We strongly object to any suggestion that our co-op or the individuals involved in the process somehow manipulate the outcome."
McBride says the co-op will continue to advocate on these points as the bill progresses. He thanked Fonterra farmers who made individual submissions alongside the co-op and the Fonterra Co-operative Council during the select committee process.
He says Fonterra remains committed to implementing the flexible shareholding structure as soon as possible.
The DIRA changes were strongly opposed by other milk processors.
The primary production select committee is chaired by Labour MP Jo Luxton. Members are Mark Cameron, Nicola Grigg, Steph Lewis, Anna Lorck, Todd Muller, Angela Roberts and Tim van de Molen.
