Opposition to bill surprises Spierings

ANDREA FOX
Last updated 05:00 04/04/2012

Relevant offers

National Farm

Agri-techs pitch problem solving ideas to Fonterra farmers On The Land: South Island Field Days comes of age Wine industry welcomes new policy blocking rogue employers access to migrant workers Workers leaving Southland in wake of Immigration changes Will big ocean fish cope in a warming world? Disturbing discovery of sheep slaughtered overnight Swannanoa dairy farmer realises dream conversion in middle of dairy downturn Mount Linton strives to be an industry leader in sheep and beef genetics Award-winning agricultural app developer hopes to tap Central Field Days crowds Hume family of Wairarapa at forefront of romney breeding

Fonterra chief executive Theo Spierings says he was "surprised" by a strong statement from the Fonterra Shareholder Council that it could not support the Government's proposed dairy industry restructuring legislation – but it should not affect the company's share trading introduction plans.

The Dairy Restructuring Amendment Bill, which had its first reading in Parliament yesterday, provides for, among other reforms, New Zealand's biggest company to introduce share trading among its farmers (TAF).

Last week the normally reserved shareholder council, which speaks for Fonterra's 10,500 farmers, said that "hidden" in the bill were provisions about the setting of a milk price that over time risked "disintegrating" the country's biggest and most important export industry.

While the council's message was not new, its language, including a hint of farmer protest action at Parliament, was unusually strident. It also suggested that Fonterra, a farmer co-operative, might face a tougher challenge than it anticipated getting its share-trading proposal past the shareholder watchdog.

Spierings agreed the council's statement was "a bit of a surprise". He suggested it sparked a special meeting of the council later.

"I don't believe it will have a serious impact on the total construct [of the bill] but for me the question is how these things are happening and how we are running our governance."

The Dairy Industry Restructuring Act 2001 was the trade-off for the creation of Fonterra by a huge industry merger.

A decade later Fonterra still controls 90 per cent of raw milk and by default sets the national price of milk.

The bill contains measures to make Fonterra's milk-price setting more transparent, including a milk-price monitoring regime by the Commerce Commission.

Ad Feedback

- Business

Special offers

Featured Promotions

Sponsored Content