The Board's PR Process

The Fonterra board has a very slick and proven PR process that they use. They present a highly rehearsed presentation that is high in gloss and low in detail. They present only details in a broad context of what they are explaining. In doing this there is no detail to dig around in or theories to question. Once this basic information is out in the open it is always questioned by both farmers and dairy commenters alike with many assumptions made confusing the counter arguments. Fonterra’s response is to keep repeating their basic messages, rather than to elaborate or acknowledge they have heard what is said. For example, The strategic plan: When it was questioned how behind boarders milk would add value to NZ milk the response was always the same: “Cross boarder trade only accounts for 1.2% of all dairy product traded. The biggest growth will be in fresh liquid dairy.” Often the accompanying figures would also be included. On the preferred option: Farmers expressing concern that the nature of the corporate would force them to reduce their shareholding level in the company and therefore their control, they roll out, “Any decision to go below 50.1% must be approved by shareholders with a 75% majority shareholder vote – and that could be 20 – 30 years away.” There is no elaboration on what market conditions could be present that would lead to that vote, what would happen if the vote failed, or any further explanation as to why that 50.1% level needs to be movable. (And to say we can’t legislate from the grave is not the right answer Mr. Van der Hayden.) Anyway this will go on for a while, along with the promise of more information to come. Once farmers agree they understand the information in front of them the board will shut the whole debate down from their end and nothing will be heard until the next installment of the saga, ie the milk pricing mechanism. The announcement of the milk price will be conducted as above and if any queries are raised about the float structure they will be met with, “There was general agreement amongst farmers in the last round of consultation that this was the direction they want to see Fonterra go down.” Which should actually be read as, “There was general agreement amongst farmer that they understood the information in the last round of consultation and would like more detail before deciding that this is the direction they want to see Fonterra go down.”
So my message to farmers is be aware of their PR process and demand more detail. Tell them what you already know and ask them to elaborate on risks associated with floating as well as the positive points.