Fonterra fined $300,000 over last year’s whey protein incident
April 4 (BusinessDesk) – Fonterra Cooperative Group, the nation’s dominant dairy exporter, was fined $300,000 for breaches of the Animal Products Act during last year’s whey protein concentrate incident.
Judge Peter Hobbs fined Fonterra $60,000 for three separate charges and $120,000 for a fourth charge in the Wellington District Court. He gave Fonterra a discount for its early guilty plea and for the steps the company took to address the issue, however he stepped up the penalty to reflect the company’s size.
The Ministry for Primary Industries charged Fonterra for failing to process dairy products in accordance with its risk management programme and because it didn’t notify authorities about the lapse, exported dairy products that failed to meet animal product standards, and failed to notify the ministry’s director general as soon as possible that the product wasn’t fit for purpose.
Auckland-based Fonterra released results of an operational review into the incident in September, which showed the contamination had occurred at its Hautapu plant in the Waikato back in May 2012 after workers became concerned a piece of plastic had fallen into a drier. Rather than downgrade the product it was decided to reprocess the powder, using a non-standard transfer pipe that was thought to be the source of the contamination. The incident led to a global recall of the contaminated product.
That initial incident was compounded by “a number of un-related events in an unforeseen sequence,” chief executive Theo Spierings said at the time. The contamination was ultimately found to be a harmless strain of bacteria.
Ultimately, the contamination scare did little to dent global demand for dairy products, which have driven a surge in New Zealand’s export receipts and helped send the terms of trade to a 40-year high.