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

  • For current supplying shareholders (including those who’ve already ceased supplying but haven’t yet sold their shares under the current 3-season requirements), up to 15 seasons initially and reducing down to 10 seasons.  
  • For new supplying shareholders, up to 5 seasons. 
  • For sharemilkers, contract milkers and farm lessors, up to 3 seasons.

As supplying farmer owners would have longer time frames to sell their shares, and we know that ownership arrangements are often restructured or changed on retirement, we would enable these farmers to transfer their shares to a person(s) approved by our Co-op who is related to or associated with them. 

We would look to introduce additional guidelines to set out criteria in relation to these “permitted transfer” provisions.

To support the alignment of share ownership and milk supply, the proportion of shares held by ceased shareholders is intended to be less than 25% of the shares in the Co-op.

 

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.  It would give all existing farmer owners greater choice about how long they retain an investment in our Co-op after they cease and should also help reduce any shorter-term sell-side pressure that may arise from the changes.

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...