Fonterra's $3.8 Billion Sale: Flimflam or Fact

The leader of New Zealand First, Winston Peters, has fervently called for more transparency from Fonterra, disputing the cooperative’s claims of providing detailed public and farmer engagement over the course of 16 months. Peters dismisses their transparency efforts as mere ‘flimflam’ and vows to continue probing until all questions about the deal are satisfactorily answered.

The political scrutiny primarily targets the long-term milk and ingredient supply agreement integral to the sale. Peters expressed concerns about the contract's security, particularly challenging the effectiveness of the "automatic rollover unless terminated" clause, which he argues lacks a solid long-term commitment.

Additionally, criticism has been directed towards the financial incentives for Fonterra’s leadership. Despite Fonterra's assurances that no bonus payments for executives are tied to the transaction's completion, Peters believes the deal plays a significant role in the executives' annual performance metrics and incentive payments.

The New Zealand First leader frames the sale as part of a troublesome pattern of national asset sales that disadvantage the nation. Drawing parallels to previous controversial sales like Silver Fern Farms and Westland Dairy, Peters insists the public and shareholders have a right to full disclosure.

Ultimately, Peters maintains that this sale jeopardizes New Zealand’s potential for economic growth and employment, asserting that such a short-sighted decision would not be made by any other developed nation. He calls for Fonterra’s board to "step up and tell us what on earth is going on," affirming that the cooperative’s initial public statements are inadequate.