Effective communications played a pivotal role in the restructure of dairy manufacturer Bonlac Foods Limited.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
To effect the restructure, it was necessary to secure acceptance by holders of 75% of Bonlac shares to a proposed trans-Tasman alliance with the New Zealand Dairy Board.
When the proposal was first announced there was widespread scepticism among analysts, the dairy industry and shareholders themselves on the prospect of a positive vote. These reservations were reflected in media reports .
The stakes were high. The livelihoods of 2,300 farming families, 1,800 employees and hundreds of smaller businesses in regional communities in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Victoria and Tasmania would be affected by the vote.
The communications strategy centred on direct contact with shareholders face-to-face where possible. This involved nearly 80 events, ranging in size from meetings of up to 550 shareholders to on-farm hay bale gatherings of as few as eight farmers.
Other means of communication included individual letters, special newsletters, flyers delivered by milk tanker, announcements on Bonlacs website, an 1800 phone hotline, personal visits by field officers and media coverage.
The ultimate effectiveness of the campaign can best be judged by the shareholder vote: 96% for the alliance with a voting participation rate of 88.5%.
 However, analysts said [Bonlac] would be unlikely to get the required 75 per cent approval for the NZDB proposal . . . . The Australian 23/03/01 (see appendix 1)
 The majority of local Bonlac suppliers are not prepared to sign-off on the companys proposed alliance . . . . Terang Express 01/02/01 (see appendix 2)
 Two resolutions needed to be passed by holders of 75% of the shares in Bonlac. One resolution recorded a 96.07% for vote; the other a 96.02% for vote. (See appendix 3)
In early 2000, Bonlac Foods Limited conducted a major strategic review aimed at best positioning itself for changes flowing through the dairy industry domestically and internationally.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
These changes were being driven by the continuing consolidation of major international producers and, at home, by pending deregulation. All Australasian dairy companies were looking to create new strategic alliances.
Bonlac also faced its own challenges, including high debt levels and uncompetitive milk prices paid to its supplier shareholders, which further increased the pressure for a major restructure.
Bonlacs comprehensive strategic review identified the ideal potential alliance partner in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New Zealand the international marketing arm of that countrys dairy industry, the New Zealand Dairy Board. Initial discussions with NZDB revealed that a Bonlac/NZDB partnership would deliver significant benefits to the shareholders of both organisations, and the vision of the first major trans-Tasman dairy enterprise was conceived.
After further analysis, Bonlac and NZDB jointly announced on 28 April 2000 that Heads of Agreement had been signed to create the alliance, and that a detailed proposal would be prepared for the consideration of Bonlacs farmer shareholders.
That announcement marked the beginning of a long and often heated debate that would culminate in a vote by Bonlac shareholders on whether to proceed with the alliance unanimously recommended by their Directors.
From the outset, it was clear that to secure the required 75% approval of shareholders would be an enormous challenge. Holders of at least three out of every four shares would need to support the change, which would see for the first time, a non-dairy farmer take a 25% stake in their company.
It was important for such a significant development in the companys history that a high shareholder participation rate in the poll be achieved. A problem was that Bonlacs non-compulsory voting process had traditionally produced a low participation rate, with previous polls attracting votes from approximately 30-40% of shareholders.
Another problem was the unavoidable delay in finalising the arrangements. This was created by the sheer magnitude and legal complexity of the ground-breaking international alliance, along with the need to meet stringent regulatory requirements.
The delays made the shareholders impatient and created an opportunity for two opposition companies to signal a joint counter-proposal. In the event, a formal offer never emerged but the move unsettled the shareholder base and the communications plan had to be quickly adapted to meet this new development.
Shareholders would not vote on the alliance until 23 April 2001 - 12 months after the proposal was originally announced.
 See joint media statement 28/04/00 (appendix 4).
Bonlacs close links with its shareholder base ensured constant feedback of shareholder sentiment during the preparation of the Communications Plan and its execution. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Three lines of direct communication between company and shareholder - through 12 shareholder-elected farmer Directors, the 90-member Supplier Representative Scheme and the companys 20 field officers in the Milk Supply Group - made it unnecessary to conduct external research.
As the program progressed, the communications team was receiving daily mood meter reports from each of Bonlacs four regions, gauging shifts in shareholder sentiment and identifying new issues.
This was an invaluable tool in modifying the overall communications messages and activities and in tailoring responses to emerging local issues. A weekly feedback mechanism indicating shareholders current preferences for, against or undecided was also instituted.
The prime target for the communications program was Bonlacs 2,300 shareholders, in whose hands the ultimate decision on the alliance would rest. This permitted precise targeting.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The secondary audience was Bonlacs 1,800 employees located in all States, but principally in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Melbourne, regional Victoria, Tasmania and Southern New South Wales.
The employees, while not having a vote, had a crucial interest in the outcome of the shareholders decision. It was a lengthy period of great uncertainty for employees and it was vital that morale be maintained.
Other stakeholders, including those who might have the capacity to influence shareholders, were also identified as target publics. This category included shareholders accountants, bank managers and farm advisers.
Throughout the program, Bonlacs domestic and international customers were kept informed of developments. Similarly the relevant Ministers and Departments in State and Federal Governments and municipal councils in areas where Bonlac conducts business were kept up to date with events.
Naturally, Bonlacs bankers, its Noteholders, the Australian Stock Exchange and regulatory authorities such as the Australian Securities and Investments Commission were kept fully informed by the companys senior financial and legal officers.
The media was treated as a valuable mechanism for communicating with the front-line stakeholders and creating the environment for informed public debate. Close contact was maintained with key reporters and editors.
To create, as a platform, an environment that would allow all stakeholders to be sufficiently open minded to rationally consider the alliance proposal;<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
To provide shareholders with sufficient relevant, reliable, accurate and timely information to enable them to make a sound assessment of the available options;
To encourage shareholders to reach the conclusion that the alliance proposal offered sustainable long-term benefits for Bonlac and for themselves, including security for their investment;
To counter any misleading information that may circulate among stakeholders;
To encourage a sound understanding of the proposed alliance among all other stakeholders, including employees, Noteholders, customers and consumers;
To impress on shareholders the importance of excerising their vote; and
To ensure the co-ordination of all messages emanating from the potential partners, Bonlac and NZDB, and thus avoid conflicting messages.
A detailed Communications Plan was drawn up to implement the Communications Strategy. In the event, the original plan had to be adapted several times as the timetable changed and as new issues emerged.
 Subsequent to the formation of the alliance, NZDB became part of Global Dairy Company which from 1 October 2001 with be the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New Zealand equity holder in Bonlac Foods Limited.
 See Communications Plan Overview (appendix 7)
All stakeholders<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Relevant information, including media releases, was loaded immediately onto a specially designated <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Alliance page on Bonlacs website.
The Explanatory Statement was a 352-page legal document outlining the details of the Bonlac/NZDB alliance. A 14-page overview was also developed. To help shareholders negotiate the mass of information available, a navigation sheet was provided.
Bonlacs monthly shareholder newsletters carried articles on alliance developments. Special editions were published to mark significant milestones.
For immediate communication, single sheet flyers were distributed by milk tanker to shareholders farms within 24 hours. Nine Alliance Updates were produced.
Over the campaign period 10 letters covering topical issues were distributed to individual shareholders.
Daily Slip Messages
Brief messages were printed on daily milk slips left in each farms dairy by tanker drivers.
During the course of the campaign, Milk Supply Officers initiated at least two calls to every shareholder to discuss the proposal.
Nearly 80 shareholder meetings were held throughout Victoria and Tasmania. There were 37 major regional meetings and forums and more than 40 smaller meetings, many on farms. The initial meeting on 28 April 2000 was telecast to all four of Bonlacs supply regions.
All shareholders with questions were urged to contact the Milk Supply Groups 1800 hotline.
Bonlac employees were kept up to date with all developments via BonLink, an electronic newsletter. More than 40 BonLink Bulletins were distributed.
Numerous staff meetings were held. Each was addressed by the CEO or Regional Managers.
Bonlac developed a database of key reporters in all sections of the media.
All media inquiries were logged so that interviews and subsequent reports could be tracked.
Individual letters and copies of the Explanatory Statement and Overview were forwarded to all holders of Bonlacs Perpetual Notes.
Key customers, many located overseas, were advised of the alliance by letter.
Consumers were kept abreast via media reports and the Bonlac website.
Key Ministers in Victoria and Tasmania, as well as targeted advisers and department officers, were kept informed by letter and personal contact.
 Explanatory Statement, Overview and Volume 1 (appendix 8)
 Navigation Guide (appendix 9)
 Monthly Newsletter and Special Edition Newsletter (appendix 10)
 Alliance Update (appendix 11)
 Daily Slip (appendix 12)
 BonLink Bulletin (appendix 13)
 Media Inquiries Database (appendix 14)
 Media Statement 11/12/00 (appendix 15)
 Media Clipping, Colac Herald, 04/04/01 (appendix 16)
The communications program which forms the basis of this entry was created to support the strategic restructure of Bonlac Foods Limited, in particular the Boards unanimous recommendation to shareholders of forming an alliance with NZDB. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The programs prime objective was to secure a minimum 75% endorsement from shareholders for the alliance.
Objective measures were used to evaluate the success the communications program achieved against the original objectives.
To provide sufficient factual information to at least 75% of the total shareholding that the trans-Tasman alliance was the best option available to shareholders and therefore it would be in their interests to vote for the proposal.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
More than 96% of votes cast were for the alliance with NZDB. Shareholders needed to pass two resolutions for the alliance to be approved. For one resolution the for figure was 96.07%, and the other 96.02%.
To answer all shareholder questions about the alliance proposal and the voting process within 24 hours of each inquiry.
This activity was undertaken by Bonlacs Milk Supply Group. Records show the objective was met in 99% of cases. In the three months leading up to the vote, Milk Supply Officers made 4,465 pro-active contracts with shareholders in relation to the alliance proposal
To encourage all Bonlac shareholders to participate in the vote on 23 April 2001 (either by attending the general meeting or by appointing proxy)
88.5% of the total shareholding voted in the non-compulsory poll (the highest participation rate in Bonlacs 15-year history; normally 30-40%)
To provide all shareholders with sufficient information about the voting process, including granting of proxies, to enable them to cast valid votes.
The vote involved two resolutions. On the first resolution, only 0.3% of the votes cast were informal. On the second resolution there were no informal votes.
To inform shareholders of alternatives to the proposed trans-Tasman alliance.
A report by an Independent Expert on alternatives to the alliance was circulated to all shareholders as part of the formal Explanatory Statement. The author made presentations at shareholder forums and was interviewed by the media. When an alternative bid was signalled, Bonlac used all means of communication, including a dedicated page on its website, to offer shareholders information about this development.
To issue prompt and factual statements to the media on all developments, to have company spokesmen available for interview at all times and to respond to all media inquiries on the same day.
A detailed database was kept of every media inquiry. 100% of journalists calls were answered, 97% on the same day. Thirty-three media releases were issued and an estimated 130 interviews were arranged.