Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Fonterra CEO flays O'Connor's milk taint talk

Fonterra CEO flays O'Connor's milk taint talk

By Pattrick Smellie

Jan 28 (BusinessDesk) - Fonterra chief executive Theo Spierings has torn strips off Labour agriculture spokesman Damien O'Connor for, he says, endangering the whole of the New Zealand dairy industry with "drastic" allegations relating to traces of a benign chemical, DCD, found in some powdered milk.

O'Connor issued a press statement alleging a cover-up of the DCD findings in September to allow the Fonterra Shareholder Fund float to occur unimpeded in November.

"If you do those allegations, you better come with some evidence," Spierings told BusinessDesk. "What you are doing here is not just a Fonterra issue, it is a New Zealand issue. You are attacking your key sector of the country.

"I'm sorry. I get a little bit emotional about it. I don't like this kind of attitude," said the recently appointed Dutch ceo, who said O'Connor risked undoing three days' intensive work, including Prime Minister John Key, with international investors and media. The issue got out of control internationally when a Wall Street Journal article questioned the safety of New Zealand milk.

Spierings is deeply offended by O'Connor's attack, and scathing of WSJ's use of a local journalist he claims was "filling in for someone" to kick the issue into international prominence.

He defends Fonterra's process once it found DCD, a nitrate inhibitor used to curb greenhouse gas emissions from farming, in tiny quantities in milk powder last spring, saying the first thing considered was whether it got "a green tick on food safety."

It did. DCD levels were 100 times lower than standards in the European Union. In other parts of the world, no standards exist.

With a "dark green" tick on food safety, the company had "a little bit of time" for collective action with fertiliser companies, telling them they must either manage the DCD issue with farmers or have Fonterra tell farmers to stop using it in the meantime, while international standards were sorted out.

The manufacturers, Ballance Agri-Nutrients and Ravensdown, withdrew fertilisers containing DCD voluntarily, a fact not notified publicly until late last week.

"We are coming with answers and telling the truth," said Spierings.

FSF units took a small hit early in trading, falling as much as 9 cents to $7.14, as international investors digested the information Fonterra sent on the issue.

The biggest risk for Fonterra would be if one country were to decide to impose even a brief, precautionary ban on milkpowder imports, which constitute a large proportion of Fonterra's $14.5 billion annual export revenues, said Andrew Bascand, managing director at Harbour Asset Management in Wellington.

"To date, there's been no market there's been that sort of reaction. Fonterra appear to be on the front foot handling it. The commentary from our Chinese agents says they feel comfortable with where are at."

Bascand said any weakness in the FSF price caused by the issue would be seen by some investors as a buying opportunity. The units were sold at IPO last November for $5.50. They listed at $6.60, and have risen above $7 since.

Spierings rubbished O'Connor's claim the DCD issue was hushed up ahead of the listing, the largest equity event in New Zealand stock exchange's history for at least a generation.

"If there had been a public health or safety issue, we would have disclosed," Spierings said.

The range of elements being tested in milk was constantly expanding as testing was becoming more sophisticated. Where there was no public health risk, Spierings argues against mandatory immediate disclosure because of the volume of disclosures that would create.

"We should not need to disclose in our whole business things we want to improve," said Spierings. "It would get (to be) a zoo. We could not run the company."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news