No Quick Solution for Fonterra Shareholders Tuesday, Sep 16, 2003
The fact that only 30% of Fonterra shareholders chose to vote on the proposal to replace Peak Notes with Capacity Adjustment should be concerning to all Fonterra shareholders says Dairy Farmers of NZ (DFNZ) Executive member Grant Rowan.
"Low voter turnout is not good enough as the strength of a co-operative depends on full participation of its members.
The proposed Capacity Adjustment uses a pricing signal instead of a capital charge to address peak milk costs. The proposal required 75% support to proceed but failed, reaching only 70%.
While shareholders rejected Fonterra's proposal, it is clear that the right solution to dealing with peak demands has not yet been found says DFNZ Executive member Lachlan McKenzie
"Fonterra's share structure still needs to be reviewed to meet the needs of shareholders and the capital structure review in 2004 may be the better time to consider another option for dealing with peak production.
"When revisited, consultation must be two way and meaningful and this cannot be achieved without more participation by shareholders."
"It is pleasing to see the company's co-operative philosophy was voted in by over 90% of shareholders who voted an endorsement of the consultation process" concluded Mr Rowan.