How do minnows manage Fonterra fallout?

Fonterra’s precautionary recall of products containing potentially contaminated whey concentrate protein has been proved to be just that – precautionary.

Exhaustive tests have found nothing to cause any concern about food safety.

That Fonterra raised a red flag, traced the product and recalled it is reassuring.

However, there are still questions over the way it handled the problem and its communications strategy, and the fallout isn’t confined to Fonterra.

Radio NZ reports that up to 20 infant formula exporters have lost up to $1 million each as a result of the botulism scare.

I know of four other companies which have also been caught in the fallout and there will be many more directly or indirectly affected.

Large companies will be better able to cope with any loss of business, but how do the minnows manage?

Those which had to recall product should be covered by insurance but others which weren’t directly affected but which have lost business won’t be.

In an address to the Wellington Chamber of Commerce this week, Trade Minister Tim Groser said:

. . . In the market place, some damage has been done, and we are not in clear and calm water yet. Some companies, particularly those without heavyweight balance sheets, are unquestionably feeling the pressure. The Government is very conscious of that and we are developing with the smaller commercial players – many of whom would be considered significant NZ companies but for the comparison with Fonterra, the only Fortune 500 company we have – a strategy to deal with their very real problems. There is a whole range of discussions underway – technical, political and commercial – addressing related but often quite distinct aspects of the problem, some of which (the administrative mistakes over meat certification to China for example) have absolutely nothing to do with food safety but which are part of the mix.

I have said on many an occasion that the least we can expect, metaphorically speaking, is a bloody nose. But frankly, while I know it will take a lot of further hard work and some re-calibration here and there, I am optimistic we will indeed recover from this and fully. As the Prime Minister has said, we have over 100 years of an unmatchable international record of putting high quality, safe food on the tables of families around the world. That did not disappear overnight. . .

Our reputation for high quality, safe food isn’t quite as shiny as it was but that isn’t necessarily a bad thing.

Perhaps we were too complacent.

This scare has given the food industry a warning about the importance of high standards and good communication.

That will be good in the long run if it results in improved practices which ensure our reputation is based on the highest possible standards.

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