One of Australia’s biggest shareholder groups has called for urgent reform of AWB, Managing Director Mr Davis said today.

Mr Gordon Davis said the Australian Shareholders Association (ASA) has written to AWB stating that the proposed reforms are in the best interest of the company.

The ASA letter (PDF, 99kb) states:

"Following recent legislative changes affecting AWB and the industry more broadly, it is important that AWB adapts quickly in a manner that best positions the company for competitive advantage. In the ASA’s view, the proposed reforms are in the best interest of the company.”

Mr Davis said the majority of the AWB Limited Board has stated that an amended AWB’s Constitution will make AWB a commercially stronger company that can offer Australian wheat growers competitive prices and services under the new system for regulating the export of bulk wheat.

“It should be noted that over 8,000 AWB A class shareholders also hold B class shares (those traded on the sharemarket) and 25 per cent of AWB B class shareholders are either wheat growers or live in rural or regional Australia and have a commercial interest in a strong and competitive AWB which Constitutional reform will achieve,” he said.

Mr Davis said the claim that A class shares are required for grower loyalty is fundamentally flawed and the evidence from deregulation of the domestic wheat market and other commodity markets is that grower loyalty ultimately depends on the most competitive prices and service offering.

“One just needs to look at the following evidence to see the flaw in this argument:

• Some WA wheat growers legitimately voted with their hip pocket when given the choice to export via bulk permits gained by CBH and other bulk handling companies;

• WAFF would have done a strategic alliance with AWB rather than Emerald if loyalty was important to them; and

• NSW growers would have delivered more than 1,000 tonnes to the National Pool in each of the last two years rather than sell to the cash market,” Mr Davis said.

Media contact: Peter McBride on 03 9209 2174 or 0417 662 451

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