Dairy industry left with costs for 1080 blackmail threat

March 24, 2016

The man found guilty of threatening to add 1080 to infant milk formula has been jailed for eight and a half years.

. . .Jeremy Hamish Kerr (60) previously admitted two counts of blackmail and the High Court at Auckland this morning heard the cost of the crime to the country was more than $37 million. . . 

By March 2015, police had 36 full-time staff on the case, resulting in a $5 million bill for the taxpayer. . .

Fonterra managing director of people, culture and safety Maury Leyland said the company lost more than $20m because of the threats and subsequent response. . .

And the Ministry of Primary Industries’ deputy director-general regulation and assurance Scott Gallacher discussed the “significant impact” on the country’s entire economy.

The ministry’s bill came to $4.2m as a result of Kerr’s actions.

“It was one of the most challenging responses MPI . . . had ever staged,” Mr Gallacher said.  

“Complex interactions and negotiations were required on international and domestic fronts.”

Had those negotiations not been successful, it could have seen a $7.5 billion reduction in GDP in the 2015 calendar year, he said. . .

LOSS TO THE COUNTRY

Fonterra – $20m+
Other dairy companies – $47,000 – $1.9m
Federated Farmers – $100,000+
Foodstuffs and Progressive Enterprises – $1.7m
MPI – $4.2m
Police – $5m
TOTAL = $37m+

Most of those costs have been and gone.

The cost of added safety checks and on-going security at all milk processing plants is continuing.

The only good thing about this whole saga is that New Zealand’s reputation for producing safe food has been strengthened.

 

 


1080 protesters threaten infant formula

March 10, 2015

An email to suppliers from Fonterra chair John Wilson tells us that police  are investigating a criminal threat to contaminate infant and other formula in an apparent protest over the use of 1080 poison in pest control.

  • The Police say that even though there is a possibility that the threat is not genuine, they are treating it seriously and have a full investigation underway.
  • The threat is not specific to Fonterra or our brands.
  • It is a criminal threat designed to cause fear to generate a political outcome.
  • We can assure customers and consumers that our own testing programmes confirm our products are secure and free of 1080.
  • We are confident the right testing and security measures are in place to protect the quality and safety of our products.

We fully support the action being taken by the NZ Police and Government.

The Ministry for Primary Industry gives the background:

Fonterra and Federated Farmers received anonymous letters in late 2014. These letters were accompanied by packages of powder, which tested positive for 1080. Police were alerted immediately.

The letters contained a threat to release infant and other formula contaminated with 1080 to consumers. This contamination was to occur unless New Zealand stopped using 1080 for pest control by late March. The person or people making this threat say they intend to run an international media campaign to publicise their threat and pressure the government to stop using 1080. . .

The  media release says:

The Ministry for Primary Industries (MPI) is working closely with Police to respond to a criminal threat to contaminate infant and other formula in an apparent protest over the use of 1080 in pest control.

MPI Deputy Director-General Scott Gallacher says the Government’s first priority is protecting the health and wellbeing of consumers.

“We are confident that New Zealand infant and other formula is just as safe today as it was before this threat was made. People should keep using it as they always have,” Mr Gallacher said.

“People should feel equally confident about using imported infant formula which has to meet New Zealand’s strict food safety requirements and is equally secure in the retail chain.

“The ability for anybody to deliberately contaminate infant and other formula during manufacturing is extremely low. Regardless, we encourage people to be vigilant when buying infant and other formula. Our advice is always to check packaging for signs of tampering. We are reinforcing that advice as a result of this blackmail threat.

“New Zealand’s food safety model is among the best in the world. New Zealand manufacturers maintain high levels of security as a normal routine. Security and vigilance has been significantly increased since this threat was received.”

Since the threat was made, the Ministry for Primary Industries – with the support of multiple government agencies, manufacturers and retailers – has put additional measures in place to further protect infant formula products, including:

  • strengthened security measures in retail stores
  • enhanced milk and milk product testing, including a new 1080 testing programme
  • increased vigilance by all relevant players in the supply chain
  • extra physical security at manufacturing premises
  • an audit programme to confirm dairy processing facilities continue to maintain the highest level of security and vigilance.

“The combined MPI and industry testing programmes confirm there is no 1080 in infant and other formula. We have tested just over 40,000 raw milk and product samples and we have had no 1080 detections,” he says.

“This criminal threat is designed to cause fear in order to generate a political outcome. It is using food as a vehicle but should not undermine confidence in our world-class food safety system or in any manufacturer.

“This type of threat does occur from time to time internationally.  We are fortunate that this is the first such threat in New Zealand, and that New Zealand has one of the world’s strongest and most secure food safety systems,” he says.

People with any relevant information should contact Police immediately on 0800 723 665 or opconcord@police.govt.nz. Information can also be provided anonymously to Crimestoppers on 0800 555 11.

Visit www.foodprotection.govt.nz for more advice on how to check packaging for signs of tampering, and for information about government’s response to the threat.

This could be a hoax but Fonterra, MPI and the police are taking it very seriously as they should.

However, some markets whose politicians and media aren’t as open as ours might not understand that it is a potential threat.

Ministers for Primary Industries Nathan Guy, Food Safety Jo Goodhew and Trade Tim Groser recognise this and are doing their best to allay concerns trading partners might have:

The Government is taking a criminal threat to contaminate food products very seriously, and is reassuring parents that our infant and other formulas are safe and that extra testing and security measures have been implemented as a further safeguard.

The New Zealand Police and the Ministry of Primary Industries announced today they have been working with a range of agencies to assess and respond to a threat to contaminate infant and other milk formula products in an apparent protest over the use of 1080 pest control.

“We would like to reassure New Zealanders that every step possible has and is being taken to respond to this threat and ensure the ongoing safety of our food products,” says Primary Industries Minister Nathan Guy, Trade Minister Tim Groser, and Food Safety Minister Jo Goodhew.

“While the police have advised the risk is low, we are taking this very seriously. Since the threat was received last November, the Police have been actively investigating, while the Ministry of Primary Industries and other government agencies have been working closely with industry players across the supply chain to insure that all New Zealanders can have the upmost confidence in these products,” says Mr Guy.

“Every resource has been made available and we have treated this as a top priority. Ministers have taken expert advice on how to respond to a threat of this type and made considered decisions.

“The Government’s first priority is the safety of our food for consumers, both here and overseas. We are highly confident our products are safe and new increased dairy product testing gives even greater assurance.

“It’s hugely disappointing that someone would try to damage New Zealand’s strong reputation for top quality products and processes.”

Mr Groser says New Zealand officials have informed authorities in our major markets about this criminal threat and our measures in response.

Mrs Goodhew says New Zealand has a world class food safety system which has been further reinforced by recent improvements.

“We now have a comprehensive new 1080 testing regime for dairy products that gives us a high degree of confidence. MPI has also analysed the supply chain in detail and worked with manufacturers to put in place additional security measures,” she says.

“This new testing is on top of our normal thorough testing, auditing and verification system. It is extremely unlikely that anybody could deliberately contaminate formula during manufacturing, and there is no evidence of this ever having occurred.

“In addition, we have worked with retailers to address any risk to food products at the retail end of the chain.

“The advice to consumers is not to consume any food product that appears to be have been tampered with, and report it to the Ministry for Primary Industries immediately.

“Any signs of tampering are easy to spot. Detailed information on how to check products and further information is available at www.foodprotection.govt.nz.”

If parents or caregivers have any concerns they can contact Plunketline 0800 933 922 or Healthline 0800 611 116.  


China admits breast is best

August 10, 2013

The breast is best message is wide spread in the west and any advertising of infant formula is careful not to suggest that it is superior to morhers’ milk.

But in China advertising of infant formula is aggressive .

However, the ill-wind of the contaminated whey protein concentrate has blown some good for Chinese babies – promotion of the benefits of breast feeding.

China’s rates of breast-feeding are among the world’s lowest. But health workers and the government are trying to revive the practice, and a drumbeat of safety scares over commercially produced milk is giving them new leverage. Visitors to Internet forums for new parents are posting comments about the benefits of breast-feeding and the potential hazards with formula.

“The risks of formula feeding are increasingly clear to the Chinese public,” Dr. Robert Scherpbier, chief of health and nutrition for UNICEF China, said in an email this week. His comment came after China’s government ordered a recall of formula imported from New Zealand because of contamination fears.

“How many infant formula crises do we still need to convince mothers and policy makers that breast is best?” Scherpbier said. . .

Some women choose not to breast feed, some who want to can’t. But some good will come out of the WPC contamination scare if more mothers who could, do.


Safeguarding infant formula

June 27, 2013

Food Safety Minister Nikki Kaye has announced work plan to further protect and strengthen confidence in New Zealand’s food assurance systems to match rapid growth in infant formula exports.

“As Food Safety Minister I have asked the Ministry for Primary Industries (MPI) to undertake the following work programme:

  • An audit on New Zealand’s existing regulatory regime to identify any areas for improvement. This includes work on verification, compliance and testing regimes. MPI is already prioritising Codex (international food standards body) and Food Standards Australia New Zealand (FSANZ) work to review end product standards for infant formula.
  • A check that New Zealand’s Overseas Market Access Requirements (OMARs) keep pace with changes being introduced in China’s regulations for infant formula. Recently MPI introduced a brand register for infant formula manufactured in New Zealand to enhance consumer confidence and ensure the integrity of New Zealand branded products in China, but there are possibly other improvements that can be made.
  • Investigate mechanisms to better collaborate and communicate with markets in Asia, particularly China, in areas such as science and labelling. It is my intention to visit China in the near future to discuss future initiatives.

“New Zealand’s infant formula exports are estimated at about $600 million a year, with approximately $170 million of that going to China.

“China and New Zealand have a strong reputation of working together to ensure the integrity of traded products.

“Export assurances are particularly important for infant formula exports where consumers have strong concerns about food safety, quality and product integrity.

“This work plan is very much a proactive approach to ensure we are staying current and responding to consumer needs and expectations. It is my intention to work closely with industry on this.

“New Zealand’s reputation around the world as a leading producer of safe and trusted food is extremely important to our competitive advantage as exporters. As the food sector accounts for 54 per cent of our total export value, we take this very seriously and this work will be on going.”

It used to be simple.

New Zealand food was produced and processed here by New Zealanders.

Now New Zealand companies produce and process food in other countries and foreign companies produce and/or process food here.

Any food product associated with New Zealand trades on our reputation for the safety and quality of our production and processing.

That reputation must be safeguarded for the sake of consumers and our economy.

This plan, and the fact that work will be on-going, is a very wise move.


Yili to buy Oceania Dairy

December 28, 2012

Chinese company Yili Industrial Group plans to spend $214 million building an infant formula plant in South Canterbury in a deal that will see it take over Oceania Dairy Group.

Yili will acquire Oceania to access its land resource consents to build a plant over 38 hectares in South Canterbury, according to a notice on the Shanghai Stock Exchange on Dec. 18. The Chinese firm said it’s attracted by New Zealand’s relatively cheap raw milk and the prospect of the free-trade agreement with China completely removing Chinese import tariffs by 2020.

The plant is scheduled to be completed by June 2014 operating at 60 percent capacity, with annual full capacity of 47,000 tonnes expected in the 2016/17 year.

The deal is subject to Overseas Investment Office and Chinese government approval.

This will increase competition in the milk market which ought to help with OIO approval.

It will also attract the xenophobes who will complain about profits going overseas.

But the company plans to spend $214 building the plant which is a significant investment that will provide jobs.

It will be buying milk from local farmers and employing locals to process it. It will also be buying other local goods and services, paying rates and tax.

All of that will be good for the local and national economy.


Rural round-up

November 13, 2012

Fonterra shares in hot demand despite unknowns – Terry Hall:

Dairy farmers should be very, very happy. It seems heaps of Asians, Australians and Kiwis want to invest in their now highly desirable, fashionable industry, even if many haven’t a clue precisely what they are putting their money into.

Even well-tested professional investors are finding the prospectus and the concept behind the $525 million Fonterra Shareholders’ Fund tough to get their heads around. It is essentially an untried investment, the first of its type ever unleashed anywhere. Essentially, owners of the co-operative company will retain full control while opening an investment opportunity to outsiders. This is to provide additional finance to further expand a crucial part of their business, which the farmers seem reluctant to do themselves. . .

Fonterra is a price taker – Milking on the Moove:

Following on from my post about how New Zealand agriculture can learn from Apple, I thought I’d look at some New Zealand companies that are doing well overseas.

Geoff Ross is a former advertising executive who rose to prominence when he founded 42 Below, the Vodka company. He and his partners have gone on to invest and run other companies which they take public. The companies Geoff and co have invested in are Ecoya which makes candles and Moa Beer.
I think he is an interesting business person to study because he hasn’t invented anything new or created a unique product. He has simply taken products which are already common place, but he creates brands that enable him to sell these products at a premium price. . .

Scientists looking at smarter irrigation technology:

Lincoln University researchers are investigating the use of microwave technology to improve efficiency and reduce water wastage from farm irrigation.

The university’s research subsidiary, Lincoln Ventures, has won government funding of almost $850,000 over two years to put its smarter irrigation concept to the test. . .

Fernbaby marketing infant formula – Sally Rae:

When it comes to travelling, Tianxi Shao could be considered a frequent flyer.

The Chinese businessman and sporting enthusiast has visited 60 countries, yet fell in love with New Zealand, captivated by the “clean, green image”.

Mr Shao is now principal of Fernbaby, a company formed to provide a locally-made high-quality alternative to the Australian and Singaporean-made infant formulas, which it says dominate the New Zealand market. . .

Wool-Rich Innovations Take Centre Stage at Shear Brilliance:

Fill your living environments with wool and do it in style – that’s the message from the Campaign for Wool.

The Campaign is hosting HRH The Prince of Wales today at Shear Brilliance – a wool showcase at The Cloud, Queens Wharf, Auckland (1pm today).

“From a carpet couch to a wool peg necklace, from grass grown on wool dags to Tiki artwork on Merino, from Zambesi’s carpet bag to the loftiness of wool knops, Shear Brilliance will surprise and delight anyone who might have thought wool was passe,” says Stephen Fookes, Chair, Campaign for Wool New Zealand. . .

Shearing Showcase At The Cloud For Prince Charles

New Zealand’s shearers and wool handlers have welcomed the opportunity to join Prince Charles in Auckland today at Shear Brilliance, a showcase celebrating the Campaign for Wool.

As patron of the campaign Prince Charles supports the industry’s efforts to raise awareness of wool’s virtues and while In New Zealand for the Queen’s Diamond Jubilee celebrations visits the Cloud in Auckland to inspect a wool showcase staged by the industry.

President of the New Zealand Shearing Contractors’ Association Barry Pullin says Royal patronage at Shear Brilliance is an opportunity for the industry to state it’s fundamental principle that more successful farmers will sustain a more successful wool industry.  . .

Farmers urged to take early action to prevent crop damage

Auckland/Waikato Fish & Game is urging farmers to make plans now for reducing the damage that can be caused by large flocks of Paradise shelduck, and other game birds.

Game Bird Manager David Klee says that with summer approaching, farmers will start to see large groups of birds moving into their newly-planted crops.

“We urge farmers to plan ahead to reduce the damage done by these flocks,” he says. “We encourage farmers to place bird-scaring equipment out before the new grass or crops start emerging and providing birds with an easy source of food.” . . .


White powder not right powder

November 1, 2012

Selling infant milk formula for $78 a can seems ambitious but that’s the aim of Auckland-based Fernbaby.

. . . One industry source said the target seemed “do-able”, but added that the 398 RMB ($78) per can price Fernbaby planned to charge in China was expensive compared with other products already on the market.

At $78 a 900g can the firm’s trade with China could be making close to $8 million a months if it meets its targets.

Fernbaby is the brainchild of Chinese businessman Tianxi Shao, who is also the managing director of Sotx, a manufacturer of badminton sports equipment in China.

Tianxi said the 2008 melamine scandal – in which six Chinese babies died after consuming milk and formula tainted with the industrial chemical – had partly prompted the founding of Fernbaby.

Since the melamine disaster imported formula products, which generally sell for between $20 and $30 a can in New Zealand, have commanded a hefty premium in China. . .

Our reputation for milk quality is hard-earned which is why Fonterra will be doing everything it can to get to the bottom of media reports that 165 kilograms of drugs have been found in one of its containers in Algeria.

Agence France-Presse reported that the massive haul was one of the largest ever intercepted in the North African country. The New Zealand Customs Service is also trying to establish the facts, while expressing confidence that the drugs did not come from New Zealand.

Customs said it was aware of Algerian media reports that a significant quantity of an illegal drug, either cocaine or heroin, had been found in a shipment of milk powder in Algeria.

Customs had not been able to verify the reports and was working closely with Fonterra. . .

The melamine tragedy was one case when white powder wasn’t the right powder.

This is another, though had it not been discovered, the black market price would have made $78 a can look cheap.


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