Communication to Fonterra farmers

10 November 2022


Communication to Fonterra farmers

The attached communication was provided to Fonterra Co-operative Group Limited farmers by the
Chairman, Peter McBride, on 10 November 2022.

-ENDS-.

For further information contact:

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

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Chairman’s Email

10 November 2022

Subject: Update on DIRA Amendment Bill

Dear [name],

Earlier today, the Primary Production Select Committee released its report on the DIRA
Amendment Bill – the piece of the legislation that will support our Flexible Shareholding
structure.

With the Select Committee process completed, the Bill will now go through a second and third
reading in Parliament before it can be passed into law. We remain hopeful this can be done
before the end of the year.

Overall, we are satisfied that it is moving in the right direction and we are pleased to see the
adoption of some of the key changes we advocated for in our submission.

The most significant of these related to the potential for third parties to take enforcement action
against our Co-operative for any perceived breaches of the Milk Price oversight regime. The
Committee has recommended this provision be removed.

We are also encouraged to see that some of our requested changes to the information
disclosure requirements have been reflected in today’s report.

However, some of our other proposed changes were only accepted in part, or not at all. The
Select Committee has recommended to retain new individual liability provisions related to the
Milk Price oversight regime, but they have at least limited these in line with the defences we put
forward in our submission.

We are also disappointed that the Committee did not support our request to remove the
additional powers of direction for the Commerce Commission.

It’s our view that the Milk Price regime is very robust and independent already. We strongly
object to any suggestion that our Co-op or the individuals involved in the process somehow
manipulate the outcome. We will continue to advocate on these points as the Bill progresses.

You can read the Select Committee’s full report here.

I would like to thank those farmers who made individual submissions alongside our Co-op and
the Co-op Council during the Select Committee process.

We remain committed to implementing our Flexible Shareholding structure as soon as possible
and will continue to keep you updated on progress.

In the meantime, please remember that you can still buy and sell shares, but that share
compliance remains on hold and will remain on hold until at least 6 months after the Flexible
Shareholding structure is implemented.

Peter.