Woolerton R Doug: Questions for Oral Answer — Questions to Ministers 
Woolerton R Doug: Questions for Oral Answer — Questions to Ministers 
[Volume:644;Page:13416] 
1. R DOUG WOOLERTON (NZ First) 
 to the  
Minister of Agriculture 
: Does he stand by the statement made on his behalf with respect to the future capital structure of Fonterra that the Government’s primary concern includes ensuring that New Zealand retains majority ownership? 
Hon JIM ANDERTON (Minister of Agriculture) 
: 
 Yes I do. The Government has been engaging with Fonterra to ensure that New Zealand’s national interests were considered as part of the capital structure proposal. The proposal that Fonterra has put to its shareholders places a significant focus on continuing New Zealand in farmer ownership of Fonterra. If the shareholders decide to accept the proposal the Government will facilitate the development of the necessary legislation to ensure Fonterra can grow internationally as a New Zealand company. 
R Doug Woolerton 
: Is he aware of the experience of Ireland’s Kerry Group co-op which undertook a capital restructure almost identical to that proposed by Fonterra where a maximum limit of outside ownership was agreed yet 20 years later the shareholding in Kerry Group held by farmers has reduced from 90 percent to less than 30 percent and does the Irish situation threaten the Government’s primary concern? 
Hon JIM ANDERTON 
: Yes I am aware of that and that example has been studied carefully. It is interesting to note however that the contribution the Kerry Group has made to the Irish economy is very very significant and it is tens of times more significant than it was before the capital restructuring that took place. 
Dr Ashraf Choudhary 
: What opportunities does the Minister see for the New Zealand economy from this proposal? 
Hon JIM ANDERTON 
: I see an innovative and internationally competitive dairy sector that will support New Zealand’s goal of economic transformation. The proposed capital structure would enable Fonterra to continue to pursue its strategy of growing internationally as a highly successful New Zealand company. Fonterra believes there are significant opportunities in the international dairy industry and believes the company is uniquely placed to take advantage of these and members of the House will have seen that in a number of countries around the world where Fonterra is investing as we speak. There are obviously significant and ongoing economic benefits for New Zealand in having large companies with global scale and reach based here in New Zealand. The Government is excited about international opportunities for the New Zealand dairy industry but of course this is a matter for the Fonterra shareholders who are the dairy farmers of New Zealand. 
R Doug Woolerton 
: Does the Government’s concern for New Zealand ownership extend to New Zealand Dairies Ltd which has been virtually taken over by the Russian company Nutritek which was able to step around foreign ownership rules despite more than 75 percent of dairy farmers supplying milk to New Zealand Dairies objecting to Russian control of the company; if not why not? 
Hon JIM ANDERTON 
: There will be of course in the case of Fonterra a range of mechanisms to ensure that Fonterra monitors the New Zealand shareholding and can act to keep New Zealand ownership above 50.1 percent. The absolute guarantee of a 35 percent co-op ownership means that only 15.1 percent of further New Zealand ownership would be required to ensure majority New Zealand ownership. I expect that New Zealand farmers will be the first ones themselves to take up that 15.1 percent - plus and therefore I am confident that Fonterra will be retained in New Zealand hands. 
Rt Hon Winston Peters 
: Does the Minister think that one shareholder with 49 percent does not have every chance of defeating a multitude of shareholders at 51 percent which was the reason why New Zealand always had the 24.9 percent rule and things started to fall apart in terms of our country’s domestic ownership being owned by New Zealanders when we changed that rule? 
Hon JIM ANDERTON 
: The point I have to make to the House is in the first instance the shareholders of Fonterra—the dairy farmers themselves—will make this decision. It will be consulted widely as I understand in a series of meetings of shareholders. The shareholders will make the decision and then Parliament itself will decide whether it will facilitate the passage of legislation to allow for that decision to take effect because the legislation will need a change by this House. So we have the shareholders themselves carefully considering the proposition and we then have the New Zealand Parliament considering their proposition to this House. So I think there is a fair amount of consultation and deliberation to take effect on this matter.