HOW IT COULD WORK: Below is our current thinking on how a Reduced Share Standard structure could work, having looked at different options for some of the features, such as the 1:4 share standard and the 4x cap on shares. We are keen to hear your views on these points over the course of the consultation process.
» New members joining the
to the existing limit on shares in excess of supply, being 5% of total shares on issue on a look- through basis. » Shares would continue to be traded on the FSM (or a similar farmer-only market) with either No Fund or a Capped Fund. This means the implications of a farmer-only market outlined on page 12 would likely apply. » Dividends would be discretionary and paid in respect of each share held (as they are today). » Voting rights would remain as they are today, in that farmer owners would have 1 vote per 1,000 kgMS supplied in the previous season so long as you continue to hold shares on a 1:1 basis relative to your supply in the previous season. This means
that if you only held the minimum 1:4, you would have fewer votes than if you held 1:1. See also the scenarios on pages 10-11. » The Share-Up Over Time and MyMilk contracts would be phased out and replaced with a standard period for all farmers to share up to the Reduced Share Standard when joining, and to sell their shares when exiting. We suggest extending the share-up and sell-down periods to five seasons (up from three seasons today). » We would continue to honour all existing Share-Up Over Time and MyMilk contractual commitments.
Co-op and farmers that are sharing up would need to buy shares to match 25% of their supply at a minimum. » Shared-up farmer owners would be able to sell down to 25% of their supply. This might only be allowed in stages – potentially over several seasons. » Any vouchers would be cancelled (as holders would not need them to count towards the Reduced Share Standard). » Minimum shareholding requirements would be based on milk supply over a rolling three- season average (as it is today). » Farmer owners would be able to own up to four times their supply in shares, but still subject
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