Wednesday, July 6, 2022

Fonterra farmers keep the faith

A week on from the revelation of contaminated Fonterra product, farmers “hang on” with confidence in their dairy co-operative.

As the list of questions about the company’s risk management strategies and public relations nous mounts, suppliers remain in support, but expect answers.

The media hype and sensationalism had likely done greater damage and posed a greater threat to the industry than one contaminated pipe, South Canterbury dairy farmer Ryan O’Sullivan suggested.

“I have respect for how Fonterra has handled this but also at this stage I remain in the camp of reserving my decision until we hear results from the inquiry,” O’Sullivan said.

“I am pretty disappointed in the media beat up, particularly TV, and the massive over-reaction. It’s almost like they were targeting Fonterra with no understanding of what this means for the whole of New Zealand.”

 

What went wrong and what arose from that needed total transparency.

“I am not saying Fonterra is doing all wrong because they are doing many things well and inquiries from this now, we expect, will mitigate a recurrence.”

O’Sullivan said despite choice for supply in his region he had not considered moving away from Fonterra.

“I trust Fonterra to have done the right thing, they have come up front and I hang on with confidence that given the fullness of time Fonterra’s reputation will remain intact.”

It was early days to point the finger at Fonterra, Central Canterbury dairy farmer Kieran Stone said.

While concerned for his own dairy farming business, the industry and wider NZ, Stone supported the dairy giant’s actions of the past week.

“It’s going to take time to sort it out. They have been transparent in fronting up. They have a list of to-do things and they are knocking them off one by one and in the process important lessons will be learned.”

The result would probably be a further strengthening of the already very high health and safety assurance processes in the NZ dairy industry, Stone said.

Willy Leferink: Helpless farmers have questions.

“Don’t get me wrong it is bloody serious. We have got shares in it and we rely on Fonterra to make an income. We have all got to get out the other end. It is early days to be saying what may or may not or what should or should not happen. At the end there must be transparency.”

Dairy farmers would have questions for Fonterra once the issues of food safety were re-established, including what, when, where, how and why, Mid Canterbury dairy farmer and Federated Farmers national dairy head Willy Leferink said.

Farmers were helpless through the initial fallout. It was an integrity issue and the third contamination in scare in five years.

“Somewhere in the chain there is a kink and we have to straighten it out. Hopefully, Fonterra will introduce protocols so this does not happen again,” Leferink said.

“We need to remember that no one is sick and this recall stems from Fonterra’s product testing. Fonterra blew the whistle on Fonterra.”

Another point to remember was that the volume involved was a fraction of the 2.5 million tonnes Fonterra produced each year.

“When I mean fraction, the 38 tonnes involved represents 0.0015%. But just as a miss is as good as a mile, the tolerance for C botulinum is rightly zero.”

This also means 2,499,962 tonnes of Fonterra produced product is unaffected.

“Getting that message out is vital in order to get our dairy products moving again,” Leferink said.

“As farmers like me own Fonterra, few people can comprehend how proud we are of what our cows, farms and company produce. Right now we owe it to our consumers here and abroad to give them facts and not speculation. We owe it to them to communicate truthfully and in a format they will understand.

“Integrity is communicating facts openly and transparently and this is thankfully happening,” Leferink said.

Large scale South Waikato farmer Ian Elliott said the botulism scare was a salutary reminder of the importance of quality systems and controls and the reputational risk any compromises bring.

“However, I feel we have responded in the right way.

“Theo Spierings has been up to China to apologise personally already. It’s the right thing to do.”

He said Spierings had any easy run to date and displayed good leadership under pressure in the past week.

Elliott said the level of NZ media attention on the issue was inevitable given Fonterra’s size but he believed it would be only a short period before another issue captured that attention.

He hoped that if standards were to be tightened even further, it would not result in an over-reaction in terms of the standards farmer-shareholders had to abide by to supply.

Elliott said he had visited Hawaii recently and was struck by the high profile posters of golfer Tiger Woods, someone who had suffered a major reputational issue only a few years ago but was today back under Nike sponsorship.

“I would have thought what he faced was a more of a reputation risk than 38 tonnes of whey powder.”

Fonterra supplier Alister McCahon of Te Kopuru, Northland, said the incident could have been handled much differently to provide good public relations for the co-operative.

“We continued investigating a test anomaly and found the first-ever incidence of Clostridia botulinum in dairy base powder. What a great story.

“There has not been one illness – what a fantastic outcome.

“Now it’s an exercise in damage control because of a huge muck-up in communications,” he said.

Annette Scott, Richard Rennie and Hugh Stringleman

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