CAPITAL STRUCTURE CONSULTATION 2021
1. On behalf of the Board
Dear Farmer Shareholders, I’d like to start by acknowledging that the temporary cap on the size of the Fonterra Shareholders’ Fund will have come as a surprise. We did not make that decision lightly. It is necessary to keep all of our potential options for change open while we have a free and frank conversation as owners. Over the past 24 months, our Co-op has been undergoing a cultural and strategic transformation. Change was needed. If we want Fonterra to continue supporting our families’ livelihoods for another 150 years, we have to keep evolving it, while staying true to our Co-operative Principles.
Our Co-op has refocused on delivering sustainable value back to New Zealand. We do that through a strategy designed to optimise the value of our New Zealand milk, using innovation, sustainability, and efficiency to deliver products that are orientated to what our customers and consumers value. Alongside that refreshed strategy, the Board has spent a significant amount of time reviewing our capital structure. Both of these pieces of work are founded on our belief that New Zealand milk volumes will likely be flat or declining in the long term as a result of environmental and other regulatory changes, and alternative land uses.
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