Wednesday, July 6, 2022

Defeat ignores farmers’ interests

The defeat of a bill to limit outside investment in Fonterra opened the co-op to the influence of competitors and foreign investors at the expense of farmers, Labour primary industries spokesman Damien O’Connor said.

“I am disappointed but not surprised that the National, ACT and Maori parties opposed my member’s bill.”

His bill would have put an upper limit on outside investment in the dairy co-operative.

“Given the determination of the National Party to promote investors over producers, limiting the ability of outside and foreign investors to buy into Fonterra was unlikely to attract its support.

“At a time when the meat industry is seeking greater unity, we see the dairy industry moving at a faster rate to abandon its unified processing and marketing structure.

“Fonterra is our largest and most successful New Zealand-owned company but it is now open to the influence of competitors and foreign investors at the expense of farmer shareholding owners,” O’Connor said.

“My bill would have limited the total amount of investment units on the market to 20% of the total value of Fonterra. I believe the lack of a legislated limit will ultimately lead to pressure to open the company up to full trading in an open market.

“The tension between milk price and dividend payment will ultimately alienate farmers and Fonterra will suffer the risks of a slowdown in milk growth that has underpinned company success.

“The opportunity for some legislated protection to avoid these risks was voted down by a National Government and its coalition partners who are more interested in providing opportunities for investors than protection for hard working Kiwi farmers,” O’Connor said.

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