Easing entry provisions to allow new entrants (or existing supplying shareholders who have a material increase in milk supply) six seasons to achieve their 33% Minimum Holding.

In the first season, they would only be required to hold 1,000 shares, and the remainder would be split evenly over the following five seasons.  At approximately 6.6% of supply over those five seasons, the compulsory investment to supply our Co-op would be significantly reduced compared to the current requirements.

Share-Up Over Time and MyMilk contracts would no longer be offered, but all existing contracts would be honoured.  Also, the share-up obligations under those existing Share-Up Over Time contracts would be reduced to reflect the 33% Minimum Holding, and the contract fee under all existing contracts would be set to zero for their remaining terms.

his would make these contracts more consistent with the capital structure changes, which do not have a fee or different payment for milk that is not share-backed.
 

Why we need to change


This would provide new suppliers with a similar timeframe to share-up to the current Share-Up Over Time contracts.

A level of flexible shareholding is critical to supporting new farmers to join our Co-op.  We think this strikes a balance between flexibility and retaining a minimum requirement for supplying shareholders to share up.

KEY FEATURES OF FLEXIBLE SHAREHOLDING
  • Increased Flexibility

  • Capped Fund

  • Future Owners

  • Extended Exits

  • Easing Entry

Giving all supplying farmer owners more flexibility in the number of shares they hold.

Why we need to change

Farmers leave for different reasons, but one of the most influential ones is the level of compulsory investment that's required to be part of our Co-op....

Capping the Fonterra Shareholders' Fund (Fund) and moving to a farmer-only market.

Why we need to change

Providing more flexibility needs to be combined with making changes to the Fund in order to protect farmer ownership and control...

Creating a more inclusive pathway to becoming a Co-op member where sharemilkers, contract milkers and farm lessors could buy and sell shares as associated farmer owners.

Why we need to change

You've told us that providing pathways for future owners to become part of our Co-op is important to recognising the critical role they play in our industry...

Providing greater choice about how long farmer owners retain an investment in the Co-op after they cease supply.

Why we need to change

We're aiming to recognise the impact on our existing farmer owners in moving to a restricted market by giving them a longer timeframe to sell...

Easing entry provisions to allow new entrants (or existing supplying farmer owners who have a material increase in milk supply) six seasons to achieve their 33% Minimum Holding.

Why we need to change

This would provide new suppliers with a similar timeframe to share-up to the current Share-Up Over Time contracts...