Ann: MEETING: FCG: Trading Among Farmers Receives

• Release Date: 25/06/12 17:59
• Summary: MEETING: FCG: Trading Among Farmers Receives a Tick
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FCG
25/06/2012 15:59
MEETING

REL: 1559 HRS Fonterra Co-operative Group Limited

MEETING: FCG: Trading Among Farmers Receives a Tick

Fonterra shareholders have voted in favour of implementing Trading Among
Farmers.

The resolution for Trading Among Farmers received a 66.45% vote in support at
Fonterra's Special Meeting today, with two out of every three votes in
favour.

Fonterra Chairman Sir Henry van der Heyden said the final vote on the share
trading scheme attracted a record voter turnout.

"Our farmers have voted in big numbers, representing 85% of the Co-op's
milksolids. It is great to see so many taking part and having their say.

"Now we can move forward with this important evolution in our capital
structure," he said.

"We've spent six years talking about capital structure and it has been a
rigorous debate and process. Our farmer shareholders have made a great
contribution and the final version of Trading Among Farmers is all the richer
because of that input."

Sir Henry said TAF ensures a stable, permanent capital base for the Co-op and
secures its future.

"We broke new ground with the formation of Fonterra and now we have the
support from our farmer shareholders to refine that model and to break new
ground again.

"As in the past, our farmer shareholders will now get behind the Co-op as we
move forward. That's what we all want, a united Fonterra.

"Over recent months we have used some of the best legal minds and
co-operative specialists to stress test the concept and proposed trading
system as part of the Due Diligence process. This final vote shows the
majority agree that TAF is a fundamental pillar for the Co-op and the Board
is absolutely unanimous in the belief that this is a lasting solution."

Sir Henry said the Board listened to farmer shareholders' concerns on
preserving 100% farmer control and ownership and the integrity of the
Farmgate Milk Price.

"We asked our farmers to vote on constitutional changes which would tighten
limits on the size of the Fonterra Shareholders' Fund, which is fundamental
to 100% farmer control and ownership, and preserve the integrity of the
Farmgate Milk Price. This resolution required a 75% vote and received 72.8%
support."

The Board will take this resolution back to the next annual meeting in
November and will seek Shareholders' Council support for this. In the
interim, further planning on Trading Among Farmers will proceed within the
parameters outlined in Resolution 2.  Sir Henry said the Board believed this
was in the best interests of the Co-op.

Fonterra Chief Executive Theo Spierings said the vote for TAF means Fonterra
can be in charge of its own destiny.

"TAF will stop money washing in and out and give the Co-op a stable,
permanent capital base to deliver on its Strategy Refresh.

"There is no co-operative anywhere around the world that is the same as
Fonterra. TAF is completely unique as is the solution to eliminating
redemption risk.

"We will now be able to implement our strategy and remain a relevant player
in the global dairy industry.  With overall demand for dairy growing, TAF
will ensure that we are well placed to grow volumes and protect our position
as the world's leading dairy exporter."

Sir Henry said the Board is still working towards a November launch for TAF
but this will be dependent on market conditions.  The pre-conditions in the
Constitution still need to be finally satisfied, including the support of the
Shareholders' Council. The Board is confident that the necessary changes to
the Dairy Industry Restructuring Act and the waivers are on track for this to
happen.  The Board will determine an exact launch date closer to the time.

The result of the vote is as follows:

o Resolution 1: Trading Among Farmers   66.45%
o Resolution 2: Constitutional Changes for Trading Among Farmers 72.8%
o Resolution 3: M. Beach Proposal      20.2%
o Resolution 4: Upson Downs Limited Proposal 23.26%
End CA:00224252 For:FCG    Type:MEETING    Time:2012-06-25 15:59:40