Fonterra Faces Political Fight Over Shakeup

NEW ZEALAND - Political parties are starting to line up against any move by Fonterra to seek a stock market listing for part of its business.

13 November 2007

2 minute read

Oceania

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"We want sustainable farming here, earning wealth for those farmers and for New Zealand, and I think this could take it out of their hands and into the hands of overseas investors."

Green Party co-leader Jeanette Fitzsimons

Government support partner NZ First was the first to warn today that it would "vigorously oppose" any move to list any part of New Zealand's biggest company on the stock exchange.

Its opposition was swiftly echoed by the Greens.

NZ First's economic development spokesman Doug Woolerton said big multinationals were dying to get their hands on Fonterra, a cooperative owned by nearly 12,000 farmers.

Sharemarket listing would open the door to foreign control and would be the worst possible option for dairy farmers, he said.

Green Party co-leader Jeanette Fitzsimons said foreign shareholding was the route toward farmers becoming peasant suppliers of raw milk with no control over their product.

"We know that for more than a decade the investment community has been just dying to get its hands on the wealth creation opportunities that Fonterra has," she said.

"It's our largest company and Fonterra is talking about global growth opportunities, but actually what we want in New Zealand is a good deal for New Zealand farmers. We want sustainable farming here, earning wealth for those farmers and for New Zealand, and I think this could take it out of their hands and into the hands of overseas investors."

Fonterra will unveil its preferred option for a new capital structure to farmer shareholders on Thursday after a year spent working on options for raising capital so it can expand internationally.

Source: National Business Review