Fonterra Co-operative Council Demands Clarity on Proposed Divestiture Strategy
Source: The DairyNews
Fonterra's plan to divest its consumer brands and exit the Australian market has sparked significant concern among farmers, according to John Stevenson, Chair of the Fonterra Co-operative Council.
The strategy, revealed simultaneously to the public and the council, is still under scrutiny as stakeholders seek to comprehend its implications. "This development is crucial for the future of our co-operative," Stevenson remarked, highlighting the urgency of the situation.
Within a day of the announcement by CEO Miles Hurrell, Stevenson had compiled a comprehensive list of inquiries concerning the potential impacts of the decision.
A primary concern among farmers is the potential loss of connection to well-established brands like Anchor and Mainland. Stevenson, expressing a deep familial and communal tie to these brands, emphasized the emotional and business implications of such a loss, despite assurances of continued supply from Fonterra farmers.
The council is now focused on challenging the co-operative to ensure robust returns on investments while adapting to the new strategic direction, which emphasizes ingredients and foodservice over consumer brands. This sector shift calls for an independent review of the board's business case to fully understand the long-term value and structural changes.
Stevenson also questioned the strategic move towards a business-to-business model post-divestment, seeking clarity on its meaning and consequences. The divestment process, expected to take 12-18 months, will likely culminate in a shareholder vote at a special general meeting to decide on the potential sale.
Within a day of the announcement by CEO Miles Hurrell, Stevenson had compiled a comprehensive list of inquiries concerning the potential impacts of the decision.
A primary concern among farmers is the potential loss of connection to well-established brands like Anchor and Mainland. Stevenson, expressing a deep familial and communal tie to these brands, emphasized the emotional and business implications of such a loss, despite assurances of continued supply from Fonterra farmers.
The council is now focused on challenging the co-operative to ensure robust returns on investments while adapting to the new strategic direction, which emphasizes ingredients and foodservice over consumer brands. This sector shift calls for an independent review of the board's business case to fully understand the long-term value and structural changes.
Stevenson also questioned the strategic move towards a business-to-business model post-divestment, seeking clarity on its meaning and consequences. The divestment process, expected to take 12-18 months, will likely culminate in a shareholder vote at a special general meeting to decide on the potential sale.
