Fonterra’s shareholders heard today that the co-operative will present options addressing concerns about some aspects of Trading Among Farmers (TAF) during a round of meetings starting in late January.
Fonterra Chairman Sir Henry van der Heyden, Chief Executive Theo Spierings, Chairman of the Board’s Capital Structure Committee John Wilson and Shareholders’ Council Chairman Simon Couper discussed progress on TAF during a pre-Christmas interview broadcast on SKY.
Sir Henry said TAF remained on track for introduction in November 2012 – but acknowledged there were concerns among some about the proposed Custodian.
At Fonterra’s Annual Meeting CEO Theo Spierings had also acknowledged these concerns and undertook to come back to farmers with some possible alternatives prior to Xmas.
“Next year, we will outline three options: the current Custodian proposal; a second option that offers some important changes to the current proposal; and a third option which gives legal title to farmers,” said Mr Spierings.
The details of these options are still being worked through and will go to the January meeting of the Board of Directors before going to Council and then being discussed with farmers to get their feedback at a round of meetings Jan 31 – Feb 3.
Mr Spierings said some farmers were worried that the Shareholders’ Fund might get too big. He reiterated that there was a 20 per cent Board limit – and that there was no intention of allowing the Fund to get anywhere near that.
“We have talked about $500 million – that is eight per cent and much closer to the mark. It is likely to sit somewhere between 7 and 10 per cent.”
Mr Spierings also said that the Board had insisted it must be able to unfold the Fund in the unlikely event it was not working.
“The TAF project team is now finalising this work and we will be talking with our farmers about this at the January - February round of meetings, but the important thing is that we can unfold the fund if it is not working.”