Fonterra regrets . . .

06/08/2013

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.


Why did it take so long?

04/08/2013

The Ministry of Primary Industries is advising people to avoid Nutricia Karicare follow on formula products from 6 months.

The Ministry for Primary Industries today announced the details of one product in New Zealand potentially containing contaminated whey protein from Fonterra’s Hautapu manufacturing facility.

“Since we were informed by Fonterra yesterday afternoon that three batches of concentrated whey protein contain Clostridium botulinum, MPI has been working intensively to identify what, if any, products on the New Zealand market may be contaminated,” Acting Director General Scott Gallacher said.

“The batches of whey product have been on sold and mixed with other ingredients to form 870 tonnes of consumer products sold in a variety of markets. I am now publishing a statement under the Animal Products Act 1999 and Food Act 1981 identifying the following products in New Zealand:

  • Nutricia Karicare follow-on formula products for children from 6 months old.

“MPI has been advised that in the case of the Nutricia Karicare, five batches of follow-on formula were manufactured using the contaminated whey protein,” Mr Gallacher said.

“Nutricia has advised that three of those batches are in a warehouse in Auckland, one is on a ship, and the other is in storage in Australia. Nutricia has advised it has locked down those batches, and they will not be sold on the market.

“MPI is still in the process of verifying this information, and today sent a team to Nutricia’s Auckland warehouses” Mr Gallacher said.

“Until this process is completed, I advise parents and caregivers with infants consuming Nutricia Karicare follow on formula products from 6 months, to use infant formula for children aged 0-6 months, ready-made formulas or alternative brands.”

Mr Gallacher said the government had last night advised regulatory authorities in markets where affected product had gone.

“MPI and the Ministry of Foreign Affairs and Trade are continuing to work with overseas regulators to provide information as it becomes available. Clearly, a number of markets are very concerned about this situation.”

MPI Acting Director General, Scott Gallacher, says he’s been informed that no batches of formula which may contain the contaminated whey are in New Zealand retail stores. MPI is still verifying where the batches are and he is taking a cautionary approach.

That is sensible.

The government is being similarly cautious.

Trade Minister Tim Groser has today confirmed New Zealand is working closely with our trading partners to keep them informed of the potential contamination of some products, including follow-on infant formula, made from whey protein concentrate contaminated with the bacteria that causes botulism.

 “As soon as New Zealand authorities were notified of this risk, we immediately acted to inform relevant authorities around the world,” says Mr Groser.

 “This has included formally notifying Infosan, the World Health Organisation’s international food safety regulators network. As more information on this issue is confirmed we will provide our trading partners with further updates.

 “We understand that the markets to which contaminated whey protein concentrate, or products using this ingredient, has been exported are Australia, China, Malaysia, Saudi Arabia, Thailand and Viet Nam.

 “New Zealand authorities are working with Fonterra to identify and trace all potentially affected products and then inform regulators around the world,” says Mr Groser.

Fonterra says none of its branded products are affected.

That will be reassuring to people who use these products but of no comfort to companies which use ingredients which might have been contaminated, or to the people who consume products using these ingredients.

. . . The whey protein is used to make a range of products, including infant formula and sports drinks.

A dirty pipe at Fonterra’s Hautapu plant has been blamed for the contamination.

The dirty pipe suggests a failure of process which has now been addressed.

But I’m still left with a question – why did it take so long to act on the risk?

Fonterra’s first media release and an email to shareholders said,  the affected batches were produced in May last year and the potential issue was identified in March this year,.

Shouldn’t there have been some action before now?

Even though there are hundreds of different strains of Clostridium, the majority of which are harmless, wouldn’t recalling such a small amount of product as a precaution have been better than waiting until the contamination was confirmed?


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