Communication to Fonterra farmers

15 March 2021


Communication to Fonterra farmers

The attached communication was provided to Fonterra Co-operative Group Limited farmers by the
Chairman, Peter McBride, on 15 March 2021.

-ENDS-.

For further information contact:

Fonterra Communications
24-hour media line
Phone: +64 21 507 072

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15 MARCH 2021
CHAIRMAN’S EMAIL: CAPITAL STRUCTURE SURVEY RESULTS


Dear [name]
In late January we invited you to take part in a capital structure survey to gauge farmer
sentiment and better understand what’s important to you. I’m pleased to now share the high-
level results with you.
I’d like to thank the 1,800 of you who shared your views with us. This feedback is being
carefully considered as we continue to develop and prioritise our potential options.
Just to recap, there are three core objectives behind the review:
1. Ensuring we have a financially sustainable Co-op for generations to come 
2. Maintaining farmer ownership and control to maximise the sustainable milk price over
time 
3. Ensuring a sustainable milk supply to support an efficient Co-op of scale

The survey results confirm that there is a strong appetite for change, with 62% of
respondents either strongly or slightly supporting a change. A common theme among the
nearly 20% of respondents who were undecided was that they’d like to learn more about
what the potential options are. We will be laying those options out clearly when we get to
that stage.

The results also gave us an insight into what you consider are the main priorities when it
comes to capital structure. We asked you to select up to three areas most important to you,
and you can see below the percentage of respondents who put the following factors in their
top three.



Those areas in light blue are the standouts, but we also heard that our capital structure
should make it easy for new farmers to join the Co-op and for existing farmers to have more
flexibility.
Another theme to come through was the desire for our Co-op to think long term. This was
the kind of typical view expressed: “Take a long-term approach to decisions, we want to be a
strong company for the next 100 years.”
Then there were a range of views on other matters such as flexibility, access to capital,
share price, the performance of the Co-op, reasons for supplying Fonterra and reasons for
holding dry shares.
We are continuing to progress the review and your feedback is helping shape the options we
are considering. We intend to be in a position to consult with you in the next couple of
months and if we decide to go ahead with a change, we would likely aim for a farmer vote
around the time of the Annual Meeting in November.
We look forward to discussing these results with you further during our farmer roadshow
next week.
Peter.