Why Fonterra accepted defeat in the dairy aisle
OPINION: Fonterra's sale of its consumer dairy business to Lactalis is a clear sign of the co-operative’s failure to compete in the branded consumer market.
OPINION: Fonterra shareholders are starting 2019 with high expectations.
Most farmers’ New Year resolution will be to continue producing milk sustainably and efficiently in the hope that global milk prices will firm.
However, looming large on their minds will be the state of their cooperative; the bottom line is Fonterra cannot afford to lose money this year after its $196 million loss in 2018 – its first ever.
Frustrated farmers have watched the board and management fail to contain the co-op’s disastrous foray into China Farms and Beingmate Food.
At home, Fonterra is losing milk supply to rivals and continues to play second fiddle to smaller processors when it comes to the milk payout battle. Thus, farmer shareholders seeking real change in their co-op focussed intently on last year’s board elections.
In what could be best described as a slap in the face to both the board and shareholders council, farmers rejected two of their three nominees for directorship.
The first director election saw shareholders back the board and council’s choice, Peter McBride, a respected agribusiness leader. However, they rejected the other two official nominees; sitting director Ashley Waugh and Maori agribusiness leader Jamie Tuuta.
Instead farmer shareholders voted in outspoken former director Leonie Guiney. In the second election, Canterbury farmer John Nicholls beat Tuuta for the third seat.
Fonterra shareholders have realised that change must start with the board; the old boys club from the early days of Fonterra’s formation needs to go. Current chairman John Monaghan, on the board since 2008, isn’t exactly the breath of fresh air that the co-op needs.
Shareholders may want a new chair with strong leadership skills, alongside a revitalised and broadened board with a more disciplined and collaborative culture.
A re-look at the director election process would also restore some confidence among shareholders on governance.
There are some signs that Fonterra is changing. Confirmation of Miles Hurrell as chief executive would be a step in the right direction. New auditors will be in place at the co-op next year.
A review of the co-op’s assets is underway and shareholders can expect Beingmate and other non-performing assets to go. Fonterra is not out of the woods, but farmers will be hoping that 2019 won’t be bad as last year.
An independent report, prepared for Alliance farmer shareholders is backing the proposed $250 million joint venture investment by Irish company Dawn Meats Group.
Whangarei field service technician, Bryce Dickson has cemented his place in John Deere’s history, becoming the first ever person to win an award for the third time at the annual Australian and New Zealand Technician of the Year Awards, announced at a gala dinner in Brisbane last night.
NZPork has appointed Auckland-based Paul Bucknell as its new chair.
The Government claims to have delivered on its election promise to protect productive farmland from emissions trading scheme (ETS) but red meat farmers aren’t happy.
Foot and Mouth Disease outbreaks could have a detrimental impact on any country's rural sector, as seen in the United Kingdom's 2000 outbreak that saw the compulsory slaughter of over six million animals.
The Ministry for the Environment is joining as a national award sponsor in the Ballance Farm Environment Awards (BFEA from next year).
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