Two-thirds of Fonterra shareholders have voted to implement Trading Among Farmers (TAF).
More than 1100 farmer-shareholders of New Zealand's biggest company attended yesterday's special meetings at eight satellite-linked venues. The resolution for the share-trading scheme that will allow outsiders to invest in Fonterra received 66.45 per cent support from a record vote by 85 per cent of shareholders.
However, farmers delivered only 72.8 support for a second board resolution for extra constitutional safeguards that would protect farmer ownership and control of the co-operative – less than the required 75 per cent for their implementation.
Fonterra chairman Henry van der Heyden said the board would prepare to implement TAF for launch in November within the parameters of the failed resolution, which would be taken back to the company's annual meeting, also in November.
Chief executive Theo Spierings addressed the meetings via video link from the Netherlands, which he is visiting on business and for family reasons.
More than 220 shareholders attended the meeting in Hawera, the country's second largest turnout.
The biggest crowd of about 300 was in Hamilton, the main venue, chaired by Sir Henry.
Fonterra director David MacLeod, of Hawera, who chaired the Hawera meeting, was disappointed the support was not higher. "It was close to the bottom of what I wanted it to be," he said.
"I truly hope the support does unite the co-op and that we can move forward together."
Only one shareholder spoke at Hawera. Don Harvey, of Oakura, once a Nuffield scholar, said many farmers would not want to see their Fonterra share price double, yet that was what investors wanted. "There will never be unity when you have outside shareholders."
Outspoken TAF opponent Michael Joyce, of Otakeho, was disappointed but not surprised at 66 per cent support and hoped the board and shareholders' council recognised it showed shareholder discontent.
He accepted the majority of shareholders had voted to support TAF in a process he described as less than ideal, and was looking forward to a unified co-operative.
"Any time you have change and rigorous debate and a democratic vote should result in the co-op being stronger," he said.
Former Fonterra shareholders' council chairman and North Taranaki dairy farmer Blue Read said 66 per cent support was a clear indication of the majority wishes of farmers. Expecting support of between 60 and 70 per cent, he was disappointed it had not reached 75 per cent, but said the vote was a great exercise of democracy.
Sir Henry said TAF ensured a stable, permanent capital base for the co-operative and secured its future. "As in the past, our farmer shareholders will now get behind the co-op as we move forward. That's what we all want, a united Fonterra."
The board had listened to shareholders' concerns on preserving 100 per cent farmer control and ownership and the integrity of the farmgate milk price.
The vote was about fixing the co-operative's fundamental problem, dictated by legislation, of having to pay out at the end of the season shareholders who left or who wanted to reduce supply. "Redemption risk is a serious risk to Fonterra and we are going to have to fix it, one way or another."
A shareholder's resolution to wipe TAF won 20.2 per cent support. Another shareholder resolution calling for a 75 per cent mandate for TAF, which would have led to a third vote if it had been approved, won 23.26 per cent support.
- © Fairfax NZ News
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