Easing Entry
We’re 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, new suppliers will 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 will no longer be offered, but all existing contracts would be honoured. Also, the share-up obligations under existing Share-Up Over Time contracts will be reduced to reflect the 33% Minimum Holding, and the contract fee under all existing contracts will be set to zero for their remaining terms.
This will make these contracts more consistent with the Flexible Shareholding structure, which does not have a fee or different payment for milk that is not share-backed.
Why have we made this change?
This will 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.
