1
00:00:00,120 --> 00:00:02,800
Speaker 1: Signs are looking good for Fonterra's consumer brand sail off

2
00:00:02,840 --> 00:00:05,160
Speaker 1: to the French getting the green light this morning. We'll

3
00:00:05,240 --> 00:00:08,959
Speaker 1: know it around ten forty five. Gary Raymer is a

4
00:00:09,080 --> 00:00:13,880
Speaker 1: Fonterra shareholder and supply joining us this morning. Morning. Gary, right,

5
00:00:13,960 --> 00:00:15,640
Speaker 1: good to have you on the show. So what do

6
00:00:15,680 --> 00:00:17,520
Speaker 1: you reckon? I mean, it seems like it's kind of

7
00:00:17,560 --> 00:00:19,800
Speaker 1: a foregone conclusion once you'll read on it.

8
00:00:21,760 --> 00:00:26,080
Speaker 2: Well, you can never say never, can you? But yeah,

9
00:00:26,760 --> 00:00:28,960
Speaker 2: I hear a few farmers who tell me they're going

10
00:00:29,040 --> 00:00:31,880
Speaker 2: to vote against it, but by a large majority it

11
00:00:32,320 --> 00:00:37,920
Speaker 2: seemed to accept management in the board's rationale for games

12
00:00:37,920 --> 00:00:39,520
Speaker 2: to go and ed with it with the sale.

13
00:00:39,360 --> 00:00:41,040
Speaker 1: Yes, which way did you vote?

14
00:00:41,080 --> 00:00:41,320
Speaker 2: Carry?

15
00:00:41,320 --> 00:00:41,479
Speaker 1: Can?

16
00:00:41,520 --> 00:00:44,599
Speaker 2: I ask? Oh? Yeah, more than happy to say I'll

17
00:00:44,640 --> 00:00:50,320
Speaker 2: voted in favor. Why was one of the one of

18
00:00:50,400 --> 00:00:54,920
Speaker 2: the tipping points for me was that it is only

19
00:00:55,640 --> 00:00:58,640
Speaker 2: seven percent of I'm not going into into the brand's business,

20
00:00:58,960 --> 00:01:01,240
Speaker 2: and I thought, so, it's not taking out a big

21
00:01:01,280 --> 00:01:04,240
Speaker 2: chunk of our milks. You know that parts should want

22
00:01:04,240 --> 00:01:06,040
Speaker 2: to source their milk elsewhere, and I don't know why

23
00:01:06,040 --> 00:01:10,840
Speaker 2: they would because they like our carbon footprint, which you know,

24
00:01:10,880 --> 00:01:13,160
Speaker 2: the same with newspapers all these companies they want to

25
00:01:13,200 --> 00:01:15,120
Speaker 2: get our product because we've got to lower carbon footprint

26
00:01:15,160 --> 00:01:17,720
Speaker 2: for taking users as part of the marketing. So I

27
00:01:17,720 --> 00:01:20,000
Speaker 2: don't think they'd ever walk away from our milk, but

28
00:01:20,080 --> 00:01:25,679
Speaker 2: it was still affected in my consideration. But the other

29
00:01:25,720 --> 00:01:29,679
Speaker 2: part too, I think it takes a lot of noise

30
00:01:29,720 --> 00:01:32,240
Speaker 2: out of the farmer arena as well when we operate

31
00:01:32,280 --> 00:01:36,680
Speaker 2: business for business rather than business consumer and there's a

32
00:01:36,720 --> 00:01:38,760
Speaker 2: lot of other things farmers can deal without having to

33
00:01:38,760 --> 00:01:41,240
Speaker 2: worry about whether people complain about the price of better.

34
00:01:43,600 --> 00:01:45,640
Speaker 1: It's a very good point, one well made.

35
00:01:45,680 --> 00:01:46,160
Speaker 2: Gary.

36
00:01:46,480 --> 00:01:48,040
Speaker 1: What do you think farmers are going to do with

37
00:01:48,080 --> 00:01:50,600
Speaker 1: the proceeds? I mean there's a lot of there's a

38
00:01:50,640 --> 00:01:53,559
Speaker 1: lot of on farm cost increases that you've been wearing

39
00:01:53,640 --> 00:01:57,200
Speaker 1: for years. Now, do you pay off some mortgage you know,

40
00:01:57,280 --> 00:01:59,400
Speaker 1: do you pump it back in? What happens to it?

41
00:02:00,440 --> 00:02:03,880
Speaker 2: Yeah? I think there'd be a wide range of things.

42
00:02:04,040 --> 00:02:05,520
Speaker 2: I think what do you need to remember as well?

43
00:02:05,520 --> 00:02:07,280
Speaker 2: And what people need to remember. They think, oh, it's

44
00:02:07,280 --> 00:02:10,680
Speaker 2: going to be a windfall for farmers. Yes for some farmers,

45
00:02:10,680 --> 00:02:12,560
Speaker 2: and may well be, but they'll be pretty long in

46
00:02:12,639 --> 00:02:16,840
Speaker 2: the tooth. When Fonterira is formed and I'm not one

47
00:02:16,880 --> 00:02:21,040
Speaker 2: hundred percent clearing the numbers anymore, but we were roughly

48
00:02:21,080 --> 00:02:23,600
Speaker 2: thirteen billion liters of milk and we've climbed over twenty

49
00:02:23,600 --> 00:02:27,200
Speaker 2: billion leads. The share price when Fonterira was formed was

50
00:02:27,440 --> 00:02:30,119
Speaker 2: four dollars a kilo and the climb to eight dollars

51
00:02:30,160 --> 00:02:34,960
Speaker 2: a kilo, so a lot of that new milk was

52
00:02:35,200 --> 00:02:38,720
Speaker 2: paid for backed by shares which farmers have to have,

53
00:02:39,600 --> 00:02:41,360
Speaker 2: you know, one shear or used to have to have

54
00:02:41,400 --> 00:02:44,120
Speaker 2: one shep for every kg, and milk solis, so that

55
00:02:44,880 --> 00:02:48,359
Speaker 2: milk or that increased production was brought out between four

56
00:02:48,360 --> 00:02:51,440
Speaker 2: and eight dollars a share price. So all this is

57
00:02:51,520 --> 00:02:53,880
Speaker 2: doing is returning to capital that some of those farmers

58
00:02:53,880 --> 00:02:56,520
Speaker 2: probably paid five or six or seven dollars for and

59
00:02:56,600 --> 00:02:58,320
Speaker 2: bringing it back down and say they have carried that

60
00:02:58,440 --> 00:03:02,440
Speaker 2: death in the balance sheet and now they can repaid

61
00:03:02,440 --> 00:03:05,920
Speaker 2: some of that deck because the share points has been

62
00:03:05,960 --> 00:03:07,600
Speaker 2: a lot lower. It's back up of six, but it

63
00:03:07,600 --> 00:03:10,480
Speaker 2: will also drop back down. So you know, all of

64
00:03:10,480 --> 00:03:12,440
Speaker 2: this is are replacing capital ont of balance Hee, there

65
00:03:12,680 --> 00:03:16,160
Speaker 2: was there taken away and then we'll be taken away

66
00:03:16,160 --> 00:03:18,760
Speaker 2: again after after the distribution.

67
00:03:18,960 --> 00:03:21,400
Speaker 1: Very great perspective. Thank you, Gary.

68
00:03:21,480 --> 00:03:21,720
Speaker 2: Raymer.

69
00:03:21,800 --> 00:03:25,880
Speaker 1: Fonterra shareholder supply voted yes. For more from Early edition

70
00:03:25,960 --> 00:03:26,919
Speaker 1: with Ryan Bridge.

71
00:03:27,000 --> 00:03:30,440
Speaker 2: Listen live to news talks. It'd be from five am weekdays,

72
00:03:30,720 --> 00:03:32,760
Speaker 2: or follow the podcast on iHeartRadio