Infant Formula sales haven’t dropped through the floor - MPI Minister

Minister of Primary Industries Nathan Guy defended the Government’s handling of the infant formula threat .
He told TVNZ ONE’s Q+A programme that the Government always knew they were going to go public.
“No, we didn't overplay it … It was a very serious event. It could, indeed, turn out to be a hoax – low probability overall from the police threat - but we had to go public” says Minister Guy.
“What’s happened over the last few days is that there's been no panic buying on the supermarket shelves. Sales haven’t dropped through the floor. They’re telling me that it’s been very very stable.”

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Repeated Sunday evening at 11:35pm. Streamed live at www.tvnz.co.nz
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Q + A

Episode 83

NATHAN GUY

Interviewed by HEATHER DU PLESSIS-ALLAN


HEATHER Why did you go public on the 1080 threat?

NATHAN We always knew that we were going to have to go public. But if you take a step back, when Fonterra and Federated Farmers first got the letter in late November, and it had a sample of 1080 mixed with infant formula, that meant that the police stepped up the criminal investigation straightaway. It was a very serious event. It could, indeed, turn out to be a hoax – low probability overall from the police threat - but we had to go public. The reason we had to go public was ultimately there were about a thousand people that were involved in discussions right through. We had to alert the manufacturers and our international trading partners, in particular the regulators, to make sure that they had information up to date to provide that through to consumers when we did go public. So it was never in our mind that we should sit on this. Because, ultimately, a lot of people knew, and we needed to give consumers here in New Zealand the utmost confidence in our food safety system.

HEATHER And ultimately the blackmailer threatened to go public as well. But the thing is why did you go public? Did you not go slightly overboard calling it a matter of national significance, when you yourself say it’s probably most likely a hoax?

NATHAN No, we didn't overplay it. We had to go out and be very strong and tell our consumers here in New Zealand that we had brought in all of this new testing processes for 1080. And actually what’s happened over the last few days is that there's been no panic buying on the supermarket shelves. Sales haven’t dropped through the floor. They’re telling me that it’s been very very stable. So consumers here have reacted as we would expect. They know that the 1080 testing that we’ve brought in, we’re now over 50,000 tests that have been carried out. We haven't found, as you would expect, no traces of 1080 in any infant formula or any other finished formula products.

HEATHER Do you admit, though, that this goes against all international advice to go public? To give this person the oxygen that they want?

NATHAN Some advice is saying that. It’s interesting – some are saying we should have alerted when we found out-

HEATHER What advice has told you that you should go public?

NATHAN I was just going to say, it’s interesting when you look at the whole spectrum, because some are saying we should have gone out when it was found – when Fonterra and Federated Farmers got the letter - should have responded then. I don't agree with that. Others are saying we should have sat on it, and I don’t agree with that. I think we've got the balance about right. And the reason it gives me some confidence that we’ve got the balance about right is because of the consumer reaction here in New Zealand, also the consumer reaction around the world.

HEATHER I want to talk about the consumer reaction around the world. You guys have said it was muted. Michael Barnett has said that it hasn’t been
muted. Who's right?

NATHAN I would say that by and large it's been a very muted response from our
international partners.

HEATHER Do you admit that there has been some impact? Because ‘by and large’ doesn’t mean 100%.

NATHAN It's too early to say whether there's been an impact or not. We're working very closely with our international trading partners. I think what has happened here is our international trading partners have said, ‘Thank you, New Zealand, for being upfront and honest.’ We let them know early in the piece. We let them know that we brought in a new testing regime for 1080. They appreciate that. They appreciate the fact that we’re being upfront and honest. They appreciate the fact that it's a low probability of this criminal blackmail threat being carried out. I find this absolutely appalling that an individual would want to harm the most vulnerable in society-

HEATHER Yes, I’m sure everybody agrees with you, but as I’ve said, you say that this is muted, but surely a shipment that is stopped outside China says that there is some concern.

NATHAN I think it is early days. Let's wait and see. We’ve had our export certificate-

HEATHER How long do we have to wait and see?

NATHAN I was just going to say we’ve had our export certificate signed off from China over the weekend, which is great news. They are going to introduce a new testing regime for 1080. We’re going to help them through that process. Our testing methodology has been shared with them. So I'm very hopeful that we won't see an impact on our border, particularly into China. From time to time you need to realise that shipments are held up for a variety of reasons.

HEATHER Why do you think this shipment has been held up? Do you admit that it’s got to do with the problem of certification? That these exporters didn’t realise they needed a certificate to prove that it was A-OK?

NATHAN Everything will be certified from 10th March going forward.

HEATHER No, but I'm asking about this shipment. Do you admit that because of this shipment not having a certification, that is why it has been stopped?

NATHAN I don't know the details of this shipment.

HEATHER Minister, you are the Minister for this. How could you possibly not know?

NATHAN I've asked my officials to work through with this particular export to understand what is the issue. They are working through with them. And
that's the appropriate place for our officials to work through with the regulator, to work through with the exporter to get to the bottom of it.

HEATHER I have seen documentation to prove that that is exactly why that
shipment has been stopped. Are you worried about that?

NATHAN I'm worried if there would be significant hold-ups at the border. And the information that I’ve had from my officials-

HEATHER So this is not significant? Just one?

NATHAN The information that I’ve had from my officials over the weekend is we're seeing a very calm response from our international trading partners. They, like the New Zealand public, have said, ‘Please keep us informed.’ We’re providing the information through to them, and that's why I can come on your programme and say that we have had a
measured response from our international trading partners. And I believe we will get through this by providing clear information through to them, by them understanding the testing regime that we’ve brought in from the early days. We have tested over 50,000 samples now. And right through from the processes from the cow to the can – we’ve reviewed all that. And they understand the importance of food safety.
They understand how, actually, all of our supply chain has got tougher securities on it.

HEATHER Okay, Minister, with regard to the shipment. I just want to take you back there, cos I appreciate all the assurances you just gave us. With regards to that shipment, do you not admit that it is a bad look that that has the potential to blow up and cause some serious concerns? If people find out that a shipment has been stopped over security concerns?

NATHAN You need to understand exporters find that there are delays at the border from time to time for a variety of reasons.

HEATHER That may be the case, and I accept that. But in this case we know why that is, and it has to do with the 1080 threat.

NATHAN Let's work through that with our officials. And I’m sure the company involved is providing all of the information through to MPI to then go and have the discussion with the port authorities and AQSIQ. I'm very confident that we can resolve this issue. This is a small issue in the overall context of how much dairy we export. We export around $16 billion of products to 160 markets. Yes, China is a very important market. It is worth $5-$6 billion. Interestingly enough, it's grown in the last 12 or 18 months by 75%. So, yes, there might be from time to time hold-ups at the border. And right now it is taking on average 30 to 40 days to clear infant formula. Prior to this particular threat-

HEATHER Minister, thank you for all those facts. I’ll have to stop you there because we need to move on. With regards to Cyclone Pam, are you worried about the impact that may have on our horticulture?

NATHAN I see that it’s a positive and a negative. The negative is there could be some destruction, particularly on our horticulture crops. A lot of them are coming right into harvest now. The positive side, I guess, if it falls on the East Coast of the North Island, some on the South Island, both of those areas have been impacted very severely by drought. They need a big drink of rain. Cyclone Pam will provide that. So I'm hoping that we don't get big destruction, and I’m hoping that we get some plentiful rainfall to turbocharge our grass growth going into autumn and winter.

HEATHER Fantastic. Minister for Primary Industries, Nathan Guy, thank you very much for joining us.

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