Fonterra regrets . . .

Fonterra chief executive Theo Spierings has expressed regret at a Chinese media conference for consumer anxiety caused by revelations that batches of whey protein had been contaminated.

“We regret the distress and anxiety which this issue could have caused,” Mr Spierings says. “Parents have the right to know that infant nutrition and other products are safe.”

The head of the world’s biggest dairy exporter says Fonterra has three key priorities: public health and food safety; working quickly with customers and regulators to resolve the issue; and working with customers and regulators to take corrective action.

The company’s commitment to China “is very high” and there is a “very strong relationship not only of Fonterra but also the New Zealand government”. . .

The distress and anxiety wouldn’t have been quite so bad if the company had handled the media briefings better, giving as much information as possible from the start rather than drip-feeding it.

Shareholders have been getting regular emails from board chair John Wilson but it was only yesterday that we got this explanation:

  • It is now more than 48 hours since we announced the serious situation we have with three batches of affected whey protein concentrate WPC80.
  • We continue to focus 100% on the health and safety of the public, working closely with our customers and regulators, and being as transparent as possible in the information we provide.
  • Our customers who have been impacted and local regulators have begun making public announcements about products that have been affected.
  • This is good for us as initially we were unable to provide details of our impacted customers.  I’d like to explain to you why this was the case.
  • When we sell commercial ingredients, like the affected whey protein concentrate, to our customers, we do not have visibility of how and where they use them. We are, of course, aware of exactly where product is in every step of Fonterra’s own supply chain, but once it leaves us, it is no longer in our control.
  • This means we did not know what customer products the affected whey protein concentrate had been used in and where these products were. Announcing the names of our international food and beverage customers without this information, could have caused even more uncertainty for consumers. 

Telling us, and the public, all this at the start would have been much more helpful than just saying they couldn’t say which products might be affected.

Explaining the testing regime, what happened, how it happened and what’s been done to ensure it won’t happen again would also have helped.

The 38 tonnes possibly contaminated is a tiny amount in the grand scheme of Fonterra’s production. Northland dairy farmer Grant McCallum, interviewed by Jamie McKay on the Farming Show yesterday, asked why it hadn’t been kept aside from the start.

He pointed out that if farmers know there’s a problem with their milk, they have to put a red padlock on the vat and asked why the processor doesn’t do something similar.

Prime Minister John Key said Fonterra will come under the microscope once the dust has settled.

Ministers have launched an all-of-government approach to Fonterra’s discovery of a bacteria that can cause botulism in some of its whey protein concentrate, and will review Fonterra’s role once it has dealt with the food safety issues, which are its primary concern, Key told reporters at today at his weekly post-Cabinet press conference.

Fonterra “will need to answer some questions which we can’t detail for you today, but they will be around the length of time it took for all of us to know, it will be about the processes it went through from when it first identified there could be an issue to one that was one that was brought into the public domain, and to the general approach to these issues,” Key said.

A second review will be into how the monitoring systems work, and Key said his “top-line assessment is that the bureaucracy-side of this issue has performed extremely well over the last 48 hours.” . . .

Once the health concerns are allayed it is essential that all these questions are answered.

But there wouldn’t be as many questions to be answered if Fonterra had had a much better protocol in place for handling the issue – or at least the publicity around it.

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