28 November 2007

Fonterra – Profit And Losses

New Zealand First has again warned that control of Fonterra will go overseas first, followed by its ownership, if the company is listed and cites the example of Ireland’s Kerry Co-operative.

“Kerry Co-operative went to the stock market in 1986, and became a very successful international food company, acquiring a number of ingredient companies and manufacturing and supplying food, food ingredients and flavour products. The intention was for the farmers to retain 80% of the listed entity – this has now plummeted to 28.1%,” said the party’s primary production spokesperson, Doug Woolerton.

“Opening the doors to outside investors will lead to the expectations of shareholders taking priority over milk prices paid to farmers. A profit-driven company will look to market products that will maximise profits at all costs, taking only what it needs from farmers. It must represent all shareholders, and cannot favour the milk suppliers.

“While farmers may realise a substantial profit initially, ultimately the listing of Fonterra will see them lose control, lose their supplier advantages and lose ownership. Farmers should cherish their investment and not support the listing,” said Mr Woolerton.

ENDS

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