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Greater flexibility will benefit supplier Shareholders

27 February 2013

Greater flexibility will benefit supplier Shareholders

Fonterra Shareholders’ Council Chairman, Ian Brown said the range of measures announced today by the Fonterra Board of Directors will be welcomed by all Fonterra Shareholder Farmers.

Mr Brown: “A bonus share issue for supplier Shareholders and greater flexibility for new and existing suppliers to become fully ‘shared up’ are pragmatic Board initiatives that the Council fully supports.

“The bonus share issue will ease pressure on Farmers, some of whom may have struggled to stay with the Co-op due to the requirements to meet the share standard, particularly given the tough conditions many suppliers are facing at the moment.

“Also important is that the redistribution of profit, in the form of the bonus shares, reinforces the Board’s claim that TAF was not a revenue gathering operation.”

Mr Brown said the new contract options will bring some relief for new and existing suppliers.

“The proposals go a long way to ensuring enduring Farmer ownership and control of Fonterra.

“The revised contracts will enable Farmers to come into the Co-op without the issue of Share Price acting as a hindrance and ease the path to Farmers becoming fully share-backed suppliers.”

The Board also announced an unchanged forecast payout for the 2012/13 season of $5.90 -$6.00 made up of a Milk Price of $5.50 per kilogram of Milk Solids and 40c-50c of earnings per share.

“Given the negative effect the weather has had on production over the past few months the Council is comfortable with the announced forecast payout,” Mr Brown said.

ABOUT THE FONTERRA SHAREHOLDERS’ COUNCIL

The Fonterra Shareholders’ Council represents the interests of Fonterra Farmers to the Board of the Co-operative and plays an active role in monitoring and assessing the governance and performance of Fonterra. There are 35 Councillors who are all Shareholders elected by their fellow Farmers in wards across New Zealand.

ENDS

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